RE: IGNORE THE NEGATIVE WEEKEND PRESS25 Sep 2020 18:32
Hello people. Sorry if this has been posted before as I didn't have time to read all the posts. It is from our "friends" motley fool on boo. They have been not nice in the past but the change of tone is appreciated:
"Review outcome
We had the results of the review on Friday, and it’s looking as comforting as I expected. After conducting the review, Alison Levitt QC reported said she is “satisfied that Boohoo did not deliberately allow poor conditions and low pay to exist within its supply chain, it did not intentionally profit from them and its business model is not founded on exploiting workers in Leicester.”
The Boohoo share price gained 10% in response, on the morning of the report’s release.
The review did identify “many failings in the Leicester supply chain“. But it also pointed out that Boohoo was in the process of rectifying those failings even before July’s news broke. That process, however, “did not advance quickly enough“.
For me, the publication of the review should put this problem where it belongs. It’s a one-off, it wouldn’t have been a long-term issue anyway, and Boohoo shareholders can get back to thinking about Boohoo share price growth.
Valuation
Boohoo shares are on a P/E of around 40. But that would drop to 32 on the following year’s forecasts.
To put that into perspective, at the end of the 2016-17 year, Boohoo shares were on a trailing P/E of nearly 70. That’s come down a lot, even though the share price is higher now. It’s because EPS will have more than trebled by the end of this year if current forecasts are accurate.
I doubt we’ll see another trebling in the next four years. But I think we’ll see enough to make the Boohoo share price look cheap now".
GLA on next week. ..as if we needed.
ST
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