Jump to content

Where to next for Asos share price ahead of FY earnings?


Recommended Posts

Fundamental and technical outlook on Asos share price ahead of FY22 earnings out Wednesday as its biggest lenders hired advisers in a move that could pave the way for a formal financial restructuring.

AsosSource: Bloomberg
 Axel Rudolph FSTA | Senior Financial Analyst, London | Publication date: Tuesday 18 October 2022 

Where to next for the Asos share price ahead of FY earnings?

ASOS’ share price trades at its lowest level in 12 years, when the company was roughly 5% of the size it is today, and, according to some analysts, at 51% of book value.

Since the online retailer is being priced well below a distressed acquisition price, the stock is comparatively cheaper than both of its main competitors Boohoo and Zalando which may make it a takeover target.

After all the Asos share price has declined by around 80% year-to-date and by around 92% from its March 2021 peak at 599,5 pence to this week’s low at 460p amid UK broadcaster Sky News’ story that lenders to the online fashion retailer are lining up AlixPartners and Clifford Chance to advise them as the online retailer’s financial performance deteriorates.

The online fashion retailer is thus facing deepening troubles after its biggest lenders, such as Barclays, HSBC and Lloyds Banking Group, hired advisers in a move that could pave the way for a formal financial restructuring.

This comes despite Asos overhauling its board in June of this year by appointing a new chief executive, Jose Antonio Ramos Calamonte, and chairman, Jorge Lindemann, to the board, both of whom were already working in senior roles at the company.

Asos' new CEO Calamonte, previously the online fashion retailer’s chief commercial officer, declined to comment on its lenders’ decision to bring in financial advisers and is expected to set out details of his plan to revive the company's fortunes alongside its results.

Analyst expectations ahead of FY 22 results

The London-listed company will present its full year results on Wednesday.

According to Reuters Refinitiv full-year revenue up to 31 August 2022 is expected to come in at £4,013bn, up 2.63% compared to a year ago, and pre-tax profit at £14m, down -92.77%.

It must be said that the online retailer has grown revenue every single year since it was founded in 2000.

ASOS revenueSource: ASOS Financials


Inflationary pressures and the cost-of-living crisis among Asos’ 20-somethings main client base – 83% of the company’s customers are under 40, with the average age of an Asos (“as seen on screen”) customer staying constant at around 28 to 29 years over the past ten years - have led to a string of profit warnings of late.

Last month, Asos said profits for the year ending August 31 would be "around the bottom end" of a previously indicated £20m-£60m range.

According to a Reuters Eikon 30 analyst poll, 3 rate Asos as a “strong buy”, 5 as a “buy”, 16 as a “hold” and 6 as a “sell” with a mean of 2.8 and a median long-term price target of 900p, some 180% above its current share price around the 500p mark (as of 17/10/2022).

AsosSource: Refinitiv Eikon

Technical analysis on the Asos share price

The Asos share price has so far dropped to levels last traded in March 2010, to 460p, gapping lower on the latest news that lenders to the online fashion retailer are lining up AlixPartners and Clifford Chance to advise them as its financial performance deteriorates further, despite having overhauled its board in June of 2022.

Asos Monthly chartSource: ProRealTime


Since the trend continues to point lower – with a series of lower highs and lower lows – further downside in the Asos share price is expected to be seen with the September 2008 and May 2009 highs as well as the February 2010 low at 425p to 403.5p representing the next downside target and a possible support zone from where a bounce may be witnessed.

Further down lies the minor psychological 400p mark.

Asos Daily chartSource: ProRealTime


For a short-term bullish reversal to be seen, the last reaction high, that is to say a candle which has a higher high than the candle prior to and after it, at last Thursday’s high at 560p would need to be overcome.

For a medium-term technical bullish reversal to unfold, the mid-September high at 743.5p would need to be exceeded, some 56% over current levels (as of 17/10/2022).

Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • General Statistics

    • Total Topics
    • Total Posts
    • Total Members
    • Most Online
      10/06/21 10:53

    Newest Member
    Joined 29/11/23 22:18
  • Posts

    • I think his partnership with Bitget is actually a success considering considering he also won 2 ballon d'or  and Bitget has continuously grown I the process. I feel more 20 million registered users in 5 years since inception is unprecedented. 
    • That's a wise call and it's important to also confirm that the exchange of your chosen should be in compliance and perhaps licensed in your country. 
    • Investing in crypto could be challenging especially the Fear of Missing out Lambo. This mostly affect traders trading strategy and ideology. Predicting the right time to buy is always cumbersome and that is why many analyst advise DCA because it curtails FOMO and gives you a long-term crypto trading mentality. In crypto Dollar Cost Averaging involves investing the same amount of money in a target token at regular intervals over a certain period of time, regardless of price. This will help to control volatility on your portfolios and minimize FOMO For example when you decide to invest $100 on a token and invest $10 daily or weekly or monthly till you fulfilled you $100 target investment on the token irrespective of the price of the token. This strategy helps a crypto trader to build his portfolio over the long term thereby he/she is not bothered by short-term volatility in the broader markets. This strategy mostly favours low-budget traders in building a strong portfolio but the problem most normally encounter is exchange minimum trading amount. One analyst advised on how to mitigate this was to accumulate on exchange that has lower trading fees and later send to where you desire to hold. He also noted that some of this exchanges are good in listing good projects for you to be among the early birds. Do you think DCA is the best method to accumulate token and which exchange offers the lowest tradeable balance and trading fees?
  • Create New...