Asos: a successful story on AIM

Tuesday, 27 May 2014

Asos, the fashion online retailer, has proved to be one of the most successful stories of floats on the Alternative Investments Market (AIM) of London.

The fashion retailer’s shares went from 3 pence to 71.95 pounds over a decade. The stock fell below 3 pence a share shortly after listing in 2001, to then rise to over 70 pounds a share earlier this year.

”Even taking a five-year view, it’s still up more than 990 percent, although they have fallen heavily this year,” highlighted ‘The Motley Fool’.

Analyst Frankin Walding said he continued to believe that Asos was well-positioned to take advantage of "the ongoing shift towards the online channel within the global clothing market". "We estimate that market could be worth 425 billion euros in 2030 if 20 percent of sales are transacted online,” added Walding.

"While Asos’s sales growth slowed in the second quarter, we do not believe that this is indicative of a sustained slowdown and continue to forecast medium-term growth between 30 percent-40 percent," he said ahead of the group's Q3 trading statement on June 10.

Goldman Sachs currently recommends buying the stock and has a 6,250 pence price objective on the shares, down from their previous price objective of 7,300 pence. Goldman Sachs’ target price points to a potential upside of 46.93 percent from the company’s current price.

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