Berenberg hikes Asos price target after update

(Sharecast News) - Berenberg hiked its price target on Asos on Thursday to 750p from 600p following the online retailer's "encouraging" FY26 trading update, which featured low-single-digit like-for-like sales growth in the fourth quarter - "the first sign of a return to growth at group level in four years". The bank noted that Asos upgraded its adjusted EBITDA guidance for FY 2026 to above the midpoint of the £150m to £180m guided range. It said the midpoint of £165m is 3.8% above company-compiled consensus of £159m.

Berenberg also said that August 2026 net debt guidance of £110m points to 2.0x lease-adjusted net debt/EBITDA, which is a significant improvement on 7.5x two years ago.

"The transformation strategy to date has involved deep business model change within Asos's own label, a switch from performance marketing to fashion relevance and investment in the customer experience with a new app," it said. "The turnaround has been backed by a sharp focus on operating cost ratios, two major refinancings and two warehouse disposals.

"Asos has earned a new place in the market and we envisage further profit recovery in the years ahead."

Berenberg maintained its 'buy' rating on Asos.

At 1240 BST, the shares were up 10% at 473p.