TMF - about to go a lot higher tomorrow13 Jan 2020 10:20
One AIM company that appears to have plenty of momentum right now is online fashion retailer Boohoo (LSE: BOO), which owns the Boohoo, Pretty Little Thing, Karen Millen and Nasty Gal brands. While many other UK retailers are struggling due to changing consumer tastes and shopping habits, Boohoo is growing at a prolific rate due to its popularity among fast-fashion-savvy, digitally-minded millennials – last year revenue rose 48%.
Boohoo shares have had a great run over the last 12 months, rising from around 185p to 312p today. Yet I think they can go higher this year. Sure, the P/E looks high already (it’s roughly 47 when you plug in next year’s consensus earnings forecast), however, when you consider that earnings are expected to climb nearly 30% this year and 25% next year, the P/E-to-growth (PEG) ratio is not overly high.
After rising exponentially between early 2016 and mid-2017, the shares spent a long time (more than two years) consolidating these gains. However, they recently broke out to new highs. I see that as bullish. Jefferies has a price target of 375p.