- MorganStanley Analyst Lauren Schenk reiterated an Overweight rating on shares of Farfetch Ltd FTCH with a Price target of $32.00.
- The analyst thinks of the complexities and many unknown aspects of Farfetch and Four’s business newly announced offers have resulted in the stock being mispriced.
- Schenk sees Investor Day as a potential positive catalyst for the stock as the sell side and the market don’t seem to have spent much time Dig in every store.
- The company needs to act – both in its core business, its new Farfetch Platform Solutions (FPS) partnerships, and in communicating the scope and impact of these deals to investors.
- The analyst noted that sell-side estimates and the current share price do not reflect these deals.
- The analyst expects luxury e-commerce penetration to rise from 12% in 2019 to 29% in 2025, meaning there’s an additional $80 billion up for grabs as brands continue to move away from wholesale.
- Schenk sees Farfetch as one of the few unprofitable technology companies on the cusp of increasing profitability.
- The company’s unique marketplace model checks every box the analyst sees as critical to fashion e-commerce success – Limited/no inventory risk, specifically fashion risk, operates in either luxury price points or low price points, industries that are more concentrated, such as z luxury e-commerce.
- Related: Farfetch shares soar as Q2 results are firmly on the ground
- Price promotion: FTCH shares trade 1.52% lower at $7.76 on the latest check Monday.
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