Analysts at the London bank have cut their recommendation to ‘equal weight’ from ‘overweight’ and slashed their price target by a third to 2,750p.
ASOS plunged by more than 20% on Thursday after it blamed continued teething problems at its new US warehouse, among other issues, for a second profit warning in eight months.
Barclays still thinks the US offers massive growth potential for ASOS, but its faith in the ability of management to deliver upon that opportunity is waning.
“We are still of the view that there is a big opportunity in the US. If inventory issues are fixed, consumer demand is there,” the number crunchers said in a note to clients.
“Management could still conceivably deliver on the promise of a return to a 4% margin, with growth accelerating to 20% in FY20/21/22. We are still inclined to see this as an achievable scenario – but we lack confidence.”
Boss ups stake
Although Barclays won’t be buying the one-time ‘King of AIM’ for the foreseeable, chief executive Nick Beighton has been trying to show that he still has confidence in the business he runs.
The boss has bought £50,000 worth of the stock, something which is usually received well by investors, who like to see directors put their own money on the line.
ASOS shares were up 1.5% to 2,139p on Friday afternoon. At the beginning of the week, they were trading at 2,650p, while a year ago they were changing hands for over 6,000p.