I think people are forgetting the all time high (after q1 results) WAS 434. Sales will have naturally increased (given summer months, post lockdown, pubs/society opening up again), with the report on Friday and international expansion developments there is no reason why this will not reach an all-time high Wednesday (since q1 they have now snapped UP a majority stake in PLT)
I suspect a minor retrace tomorrow morning, FOMO kicking in Monday afternoon, big FOMO Tuesday and to finish at 440/450 Wednesday- post lockdown increase in sale and BOO America really kicking off (56% increase in international sales in Q1)
RE: How to play the weekend - Hold!!!25 Sep 2020 12:04
No idea why the new factory being built (to ultimately cut the middle man) was not mentioned, all claims are the past now and concluded no offense of slavery by the regulator (as reported by FT) and an independent QC.
Wed- 420++++++++ excited to see international sales growth given Q1's number
I agree, the business press has covered this well, of course, the tabloids will quote sections- it sells. TIming however is everything, we have 2 full trading days left before results, which we know will be stellar. Q1 results, middle of lockdown, were unbelievable (international growth up 56%) i expect better results given lockdown restrictions lifted and general summer retail boost in sales. 415, as Jp Morgan quoted, is likely although could equally see a new high
Genuinely very surprised at the current share price, 2 full trading days left... i suspect 332 tomorrow, 340/50 Monday FOMO will kick in, i suspect a few more positive broker ratings and boom Tuesday 400+. Thereafter, similar to Asos further steep increases perhaps to the 415, 430 mark with a good internal investigation news. Was very interesting the Jp Morgan note on slavery claims, previous critics suggested the business model relies upon the underpayment of factory workers:
"Boohoo has already demonstrated its ability to roll out “test & repeat” internationally with the majority of its sourcing (60%) now coming from overseas. If it were to shift the remaining UK portion to an international supplier base we think the cost benefit (c.140 [basis points] of gross margin) would likely offset any incremental clearance drag from (slightly) slower lead times (c.2 weeks). We see short term disruption as the biggest risk of a sourcing shift”, JP Morgan said.
Inferno: I think they (the BOD) have comfort in the fact that the results will be strong, everything has been mentioned before but Q1 results were amazing in the midst of lockdown. As also mentioned before, SP wise, the fundamentals will be the ultimate driver behind this. The ESG issue, however, will remain a potential issue (for big institutional investors anyway) unless this issue is quashed or at least the report is favourable for Boohoo.
I am long this am hoping to see this get back to 400+ but realistically I say 360-380 post 30 09
No offence taken- its good,as you say, to share differing opinions trying to avoid the bias a potential big holding/short.
Ultimately the allegations were bad news, initially very bad news. However, the initial Sunday Times had their own f*ck ups. They cited a company involved that had ceased for x amount of years.
A few days later the FT had a promising article rubbishing the reports stating the NCA had found no wrongdoing or anything to support the modern slavery claims- fine.
In terms of their reaction: 1- thanked the Sunday times for raising an issue they were otherwise, supposedly, oblivious to. 2- Made an open statement to say they have cut ties with the mentioned suppliers and any suppliers deemed to be below the standard expected, namely factory conditions and basic minimum wage- again 3- Set up an independent investigation- illustrates taking it seriously and allowing for due process. This included a public call for evidence 4- open letter to Priti Patel calling for a joint effort between industry and government & urged and endorsed the call for the gov to lisence garment factories. 5- (perhaps not linked to general PR) but 16th July huge director dealings- a massive boost to otherwise nervous investors. 6- update on the internal report 7- Findings to be released.
SO to summarise: -acknowledged perhaps some wrongdoing (refreshing) - actively terminated suppliers that did not adhere to their code of conduct (taking it seriously, proactive) -set up an independent review (transparent) -openly in contact with the GOV re the license scheme
We all know the results will be stellar, personally, i expect Boohoo to outperform ASOS again (relative to size, year on year growth) for the 5th quarter in a row, but where do we see this going? 300+ certainly, skyrocket to 350? I suppose the caveat is the internal report re the allegations. These guys have, thus far, dealt with the allegations fantastically.