(News Bulletin 247) – Liberum raises its recommendation on Asos from ‘sell’ to ‘hold’, with a price target reduced from 500 to 470 pence, the risk of a capital increase by the British loan specialist wear online having now materialized.
‘A capital increase and a new credit facility may well help improve flexibility with an extended term and easier covenants, but comes at the cost of 20% dilution and an interest rate of 11 %’, underlines the broker.
While successful execution of the strategy could offer significant upside potential, Liberum considers execution risk to remain high and therefore ‘needs more evidence before it turns positive’ on the case.
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