Broker tips: Asos, Integrafin

Analysts at Deutsche Bank lowered their target price on fast fashion retailer Asos from 900.0p to 800.0p on Thursday but said the group looks to have "sufficient debt headroom" to cope with its recent "painful dose of reality".

Berenberg said Asos has agreed to financing that will give it time to simplify its business model with increased fashion focus over the next 12 months, while also improving unit economics and managing its cost base more effectively.

The bank, which reiterated its 'buy' rating on the stock, said the investor debate had started to move towards one of survival and cash management, which explains the recent relief rally in the group's share price.

"The big picture is that we believe Asos is taking the necessary steps to ensure it remains relevant to its consumers with the higher fashion component necessary for differentiation from larger platforms," said DB.

However, the analysts opted to lower its FY23 adjusted underlying earnings estimates by 47% given the updated guidance but can still see the potential for progression over the next few years as the plan evolves.

Analysts at Berenberg lowered their target price on investment platform operator Integrafin from 480.0p to 320.0p on Thursday but said net inflows at the group remained "resilient" despite current market conditions.

Berenberg said Integrafin, which published a fourth-quarter funds under direction trading update on 18 October, saw FuD fall roughly 0.5% in the period, with net inflows more than offset by negative market movements in FuD.

However, although overall FuD fell throughout the year, driven by negative market movements in asset values, the German bank stated the "resilience of organic growth" was supportive for IntegraFin's long-term investment case.

"We have revised our forecasts going forward, primarily to incorporate the impact of the macroeconomic environment and FY 2022 reported FuD," said Berenberg, which stood by its 'buy' rating on the stock.

"To reflect changes to our forecasts and industry multiples, we have revised our price target to 320.0p per share, implying circa 22x price-to-earnings ratio (FY 2022E). IntegraFin's shares have fallen circa 60% year to date, and the company now trades on circa 16x P/E (FY 2022E), which is at the bottom end of its historical range of 20x-30x P/E."