Value15 Nov 2022 09:23
Superdry 'a top pick' for next year says Liberum
A strong recovery in 2022, with revenues up 10% a return to profit is proof that the strategy is working, said the broker
Superdry PLC (LSE:SDRY) is “a top pick for 2023” said analysts at Liberum, which it believes is making progress despite a tough backdrop and is “very unlikely” to go bust in a consumer downturn.
Liberum’s confidence in its surviving the current economic backdrop is “driven by the group’s improved balance sheet health and just how well costs and cash were managed during COVID.”
Commenting on a house stock, Liberum said the share price, down 60% in the year so far, is “anomalous when set against the £35mln profit swing the group just announced.”
Liberum also believes guidance for 2023 is “prudent,?1; considering the Autumn/Winter product ranges and a management team focused on improving wholesale and benefits from cost-cutting measures.
Analysts said there has been “tangible turnaround progress” in its product, social approach, sustainability and cash management since Julian Dunkerton returned in 2019 as CEO.
Superdry, Liberum said, has also refocused its brand, fixating on fabric, shape and how to portray itself as in a “strong value-for-money price point” that makes it stand out from the crowd.
A strong recovery in 2022, with revenues up 10% and a return to profit is proof that the strategy is working, said the broker.
Liberum set a 'Buy' rating on the stock, with a target price of 500p.