Broker snap: Overseas focus for ASOS

20th Apr 2010 13:28

KBC Peel Hunt is maintaining its 'wait-and-see' attitude on online retailer ASOS but sees scope for revenue upgrades as sales momentum builds in the retailer's key territories."ASOS remains one of the few genuine organic retail growth stocks, with further progress to be delivered in the UK and overseas, although the latter remains the growth engine in our forecasts," KBC analyst John Stevenson said. The US, French and German web sites remain on track to open this year, the company said.The fourth quarter "suffered from overly tight stock planning, although we note that both UK and International sales growth rates are accelerating as stocks rebuild in the new year," Stevenson added.With a price/earnings ratio of 23 based on projected 2011 earnings the stock rates no more than a 'hold' in KBC's view. The broker has left its price target unchanged at 500p.Singer Capital Markets is another broker that thinks the shares are fairly valued. It has a target price of 425p.Panmure Gordon is a buyer, however, even though sales growth was slightly below expectations. "Current trading is very strong vs. a strong comparable period and the outlook statement is very positive. We reiterate our buy rating and 607p price target," the broker said.