- Morgan Stanley Analyst Lauren Schenk reiterated his overweight rating on the stock Farfetch Ltd FTCH with a price target of $32.00.
- The analyst thinks the complexity of Farfetch’s business and the many unknowns and four newly announced deals have led to the stock being mispriced.
- Schenk sees the investor day as a positive boost for the stock, given the sales and the fact that the market doesn’t seem to be spending much time digging into each deal.
- The company must execute both in its core business, the new Farfetch Platform Solutions (FPS) partnerships, and by communicating the size and impact of these deals to investors.
- The analyst said sell-side estimates and the current share price do not reflect these deals.
- The analyst expects luxury e-commerce revenue to grow from 12% in 2019 to 29% in 2025, which would add an additional $80 billion as brands continue to move away from wholesale.
- Schenk sees Farfetch as one of the few tech businesses with growing profitability.
- The company’s unique marketplace model checks every box that analysts see as critical to fashion e-commerce success – limited/no material risk, especially as fashion risk operates at either luxury price points or low price points. Luxury ecommerce.
- Related: Shares of Farfetch will fly higher as Q2 earnings firmly hold the ground.
- Price Action: Shares of FTCH are trading 1.52% lower at $7.76 this past Monday.
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