Analysts at Liberum reiterated their ‘buy’ rating and 500.0p target price on clothing retailer Superdry following a “phenomenal deal” that it believes realises “great value” for shareholders.
Liberum said Superdry’s move to sell the rights of its intellectual property in the Asia Pacific region to a third party for a net cash consideration of £34.0m was “a very positive step” for the future of the business.
Following its exit of China in 2020, Liberum noted that there were no imminent plans for Superdry to invest in the territory but noted that through this deal, the company has delivered “significant shareholder value” for a territory that delivered just low single digit pre-tax profits in 2022.
“This deal highlights three key facts: (1) how low the current market cap is (this deal constitutes 38% of the current market cap), (2) strengthens the balance sheet significantly (moving into a net cash position), and (3) the belief that Superdry has global appeal and potential has been shown by a very well respected third party,” said Liberum.
“This deal de-risks the balance sheet, protects the P&L and whilst a lot of work is yet to be done on its cost reduction programme, is a very positive step in the right direction. The shares should rise significantly today.”
Reporting by Iain Gilbert at Sharecast.com
