Times on Sunday19 Dec 2021 11:21
Barclays has cut its rating on Boohoo Group after the fast-fashion retailer surprised with a profits warning.
The bank said there had long been risks to trading but the scale of the online retailer's warning on Thursday had been "very significant". Barclays has cut its rating to 'equal weight' from 'overweight', and also slashed its price target to 395p from 135p. It flagged THG as "more interesting" European e-commerce operators.
THG attacker calls a truce after shares fall
"The City researcher that helped precipitate a spectacular slump in the shares of The Hut Group has indicated the worst is now over for the troubled online retailer.
Research firm The Analyst has withdrawn its short recommendation on THG, in effect declaring that the share price has no further to fall. The firm told its clients it was difficult to see further downside and that THG’s core beauty and nutrition businesses appeared sound.
In October, The Analyst recommended that clients open short positions — a bet against the share price — in the group on the basis that its Ingenuity ecommerce platform was grossly overvalued. The firm also highlighted concerns around THG’s corporate governance and noted that its cashflows were deteriorating.
THG’s shares have since slumped 63 per cent to 190p.
Attempts by THG founder and chief executive Matt Moulding to restore investor confidence in Ingenuity — which had underpinned the group’s valuation — backfired dramatically, prompting the stock to fall even further.
The collapse in THG’s shares has raised doubts over whether Japanese investment giant SoftBank will exercise its option to buy a 19.9 per cent stake in Ingenuity for $1.6 billion (£1.2 billion). As a whole, THG is currently worth £2.3 billion."
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