Broker snap: ASOS a 'sell' despite sales surge

13th Apr 2011 10:45

Even though internet fashion retailer ASOS saw UK sales surge in the fourth quarter, finnCap remains a 'seller'.UK sales grew 24% in the three month period, slightly better than the growth in the previous two quarters, the broker notes. Full-year growth was also 24%."The increase in the price of ASOS's shares during the past year has been driven by rating expansion: the consensus has barely changed. Implicitly, the market seems to be assuming that the revenue opportunity is greater than previously believed," said analyst David Stoddart.While the broker says that there is no doubt that the shares should trade at a "healthy premium" to sector rivals, it says that this is still reflected in its target price "which nevertheless falls a long way short of the current price." A 1,225p target price is maintained.---bc