Broker tips: ASOS, On the Beach
By Benjamin Chiou
Date: Thursday 24 Sep 2026
(Sharecast News) - Berenberg hiked its price target on Asos on Thursday to 750p from 600p following the online retailer's "encouraging" FY26 trading update, which featured low-single-digit like-for-like sales growth in the fourth quarter - "the first sign of a return to growth at group level in four years".
The bank noted that Asos upgraded its adjusted EBITDA guidance for FY 2026 to above the midpoint of the £150m to £180m guided range. It said the midpoint of £165m is 3.8% above company-compiled consensus of £159m.
Berenberg also said that August 2026 net debt guidance of £110m points to 2.0x lease-adjusted net debt/EBITDA, which is a significant improvement on 7.5x two years ago.
"The transformation strategy to date has involved deep business model change within Asos's own label, a switch from performance marketing to fashion relevance and investment in the customer experience with a new app," it said. "The turnaround has been backed by a sharp focus on operating cost ratios, two major refinancings and two warehouse disposals.
"Asos has earned a new place in the market and we envisage further profit recovery in the years ahead."
Berenberg maintained its 'buy' rating on Asos.
Shore Capital maintained its 'buy' rating on On the Beach on Thursday after it delivered a "strong" FY26 outcome.
OTB said it expects FY26 adjusted pre-tax profit of £22m to £23m, in the top half of the £18m to £25m guidance range given at the first-half results. Shore said this was ahead of its forecast of £20.6m, with the mid-point up around 9%.
"Importantly, trading momentum appears to be carrying into FY27F," the broker said, noting that total bookings over the last eight weeks have grown 17%, and that management has introduced FY27F adjusted pre-tax profit guidance of £28m to £35m, equivalent to growth of around 25-55% versus FY26.
"Whilst the double digit profit is, in our view, notable, we highlight this is lower than consensus and our forecasts (SC: £36m, and consensus ranging as high as £39m), with ongoing uncertainty in the Middle East along with uncertainty surrounding the UK consumer backdrop referenced as reasons," Shore said. The broker downgraded its FY27 pre-tax profit estimate by 11% to £32m.
"Overall, this update reiterates the combination of market share gains, accelerating booking momentum, strong cash generation and a confidence in ongoing profit growth, albeit softer than expectations," Shore said. "Trading on a low-mid single digit EBITDA multiple, we retain our buy recommendation."
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