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  • CS & Barclays drop target price on Asos
  • Jefferies raise Petrofac target price and issue ‘buy’ rating
  • JPM Cazenove reiterates ‘buy’ rating for Glencore
  • JPMorgan cuts price targets on Deliveroo and Just Eat

Credit Suisse halved its Asos (LON: ASC) target price to 1,450p (2,850p), giving it an ‘outperform’ rating, while Barclays followed suit dropping the price target by a third to 1,075p (1,615p), giving it an ‘equal weight’ rating. Asos, the UK’s largest online fashion and beauty store, and its peers face a number of pressures, including reduced consumer spending as a result of higher prices driven by soaring inflation and record low consumer confidence. Asos, however, has underperformed both its retail sector peers and the FSE250 over the past year. At close of trading yesterday, the stock was priced at 850p, a return of -64.4% YTD and -82.1% over 12 months.

Jefferies raised its Petrofac (LON: PFC) price target to 160p (130p), giving it a ‘buy’ rating. Petrofac, a provider of services to the global energy industry, continues to win major multi-year contracts, most recently in the North Sea, Australia, Africa and the Gulf of Mexico, putting behind it an investigation by the UK’s Serious Fraud Office that had restricted its scope to bid for new work. In April, Berenberg upgraded the stock to ‘buy’, and in May JP Morgan reiterated its ‘overweight’ rating, raising its target price from 170.0p to 180.0p, on the basis that the share price could double as the firm rebuilds its contract pipeline. At close of trading yesterday, the stock was priced at 132p, a return of 14.5% YTD and 14.7% over 12 months.

JP Morgan Cazenove reiterates its ‘buy’ rating for Glencore (LON: GLEN), the Anglo-Swiss miner and trader, raising the target price to 650p (630p). Deutsche also has a ‘buy’ rating on the stock, with a slightly trimmed target price of 580p (590p). Barclays and Morgan Stanley have an ‘overweight’. Glencore last week announced, ahead of interims in July, that first-half adjusted earnings before interest and tax from their marketing business would exceed $3.2bn, which is at the top end of its guidance figure for the year, thanks to surging commodity prices, particularly coal. At close of trading yesterday, the stock was priced at 482.6p, a return of 28.7% YTD and 60.9% over 12 months.

JPMorgan downgrades Deliveroo (LON: ROO) to ‘underweight’ (neutral), dropping the price target to 81p (94p). Broker consensus is broadly positive, however, with four buy recommendations, seven neutrals and no sells. In its April trading update, Deliveroo reported Q1 ‘solid growth’ of 12% in gross transactional value, compared to 58% and 36% in the previous two quarters. Order numbers also weakened, despite business deals with Waitrose, Carrefour, Amazon Prime and WHSmith. Deliveroo only listed in April last year, and its shares performance has been steadily downhill since its 52-week high of 396.8p in August 2021. At close of trading yesterday, the stock was priced at 87.56p, a return of -58.2% YTD and -65.8% over 12 months.

JPMorgan also cuts its Just Eat Takeaway.com (LON: JET) price target to 1,446p (1,758p), giving it a ‘neutral’ recommendation. Like its rival Deliveroo, Just Eat Takeaway is facing a number of headwinds, including a deflation of the e-commerce bubble, as consumers return to pre-pandemic buying habits. The share price was not helped either by calls from an activist investor for boardroom changes – chief operating officer Jörg Gerbig and chairman Adriaan Nühn are standing down. At close of trading yesterday, the stock was priced at 1,483p, a return of -63.6% YTD and -77% over 12 months.

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Please note this article does not constitute investment advice. Investors are encouraged to do their own research beforehand or consult a professional advisor.

James Norris

James Norris

James is a highly experienced writer and editor, gained from more than 20 years in the financial services industry, in particular wealth management and asset management.

He initially worked as a financial journalist for a number of leading media brands, including the FT Group, Financial News, Euromoney and Incisive Media, covering most aspects of the asset management industry. More recently, James switched to work as an in-house content specialist for fund management and wealth management groups, including JP Morgan Asset Management, Quilter Cheviot Investment Management, AXA Investment Managers and Invesco Perpetual.

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