DAVY VIEW

Fast fashion has sustained its irresistible growth in the UK across the COVID pandemic. ASOS (ASC), operationally challenged through 18/19, has steadied the ship and re-built the senior management cadre. The social conversation indicates a number of dynamics at play — ASC is joined by boohoo (BOO) at the top table; the emergence of the omni-consumer; and the consumer perspective on all things ESG perhaps gives ASC time to get its house in order. That said, earnings growth remains modest at ASC, 20/23 CAGR c.+13%, and despite recent weakness, we see no upside and initiate with a ‘Neutral’ rating and price target of 2600p.