ASOS PLC

ASC: XLON (GBR)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	GBX 9,147.00	Tglfr	Swdlldnd

ASOS Sales and Profits Take Hit in 2022, but Shares Remain Undervalued

Jelena Sokolova

Oct 19, 2022

We are reducing our fair value estimate for ASOS to GBX 3,360 from GBX 4,110 to account for worse-than-expected current-year results and slower expected growth in 2023 largely as a result of more challenging macro conditions in the company’s main markets. We still expect ASOS to grow at a low-double-digit pace over the next 10 years as we see underlying growth drivers of online apparel intact. However, the slower pace of the firm’s investment in customer proposition (capital expenditure plans reduced by GBP 25 million-GBP 50 million in 2023) and challenging macro conditions would make this growth more back-end loaded. Shares are still very cheap, trading in deep 5-star territory.

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