Not great and nothing to do with the MM's we get told daily27 Nov 2024 18:26
Jefferies has downgraded Boohoo Group PLC (AIM:BOO) to 'hold' from 'buy' and slashed its price target from 70p to 30p, citing persistent challenges in sales and profitability across its core brands.
The company’s outlook remains bleak despite efforts to streamline operations and focus on its Debenhams business.
Boohoo has faced declining revenues, with a further drop of 9.4% expected for the current financial year. The Youth Brands, which account for over 80% of its revenue, continue to struggle, and the anticipated recovery has been delayed yet again.
Debenhams, described as “front and centre” in the company’s strategy, has potential but remains relatively small, contributing an estimated £60m in revenue annually.
Jefferies expressed concerns about Boohoo’s funding situation ahead of a significant loan repayment next year, suggesting potential asset sales, including brand disposals, as a likely solution.
The report highlighted Boohoo’s difficulties in the competitive fast-fashion market and noted that operational changes to improve profitability have further hurt customer volumes.
With limited growth prospects in the near term and a challenging retail environment, Jefferies expressed doubts about the company’s ability to recover meaningfully. The downgrade reflects reduced confidence in Boohoo’s turnaround strategy and its capacity to meet ongoing financial challenges.
The shares were flat at 31.21p