Analysts Bullish On Farfetch After September IPO

After a tremendously successful September IPO, shares of online luxury retailer Farfetch Ltd FTCH have cooled in the past month. Sell-side analysts were weighing in on the stock now that the quiet period has expired, which gave the shares a boost.

Here’s a sampling of what analysts had to say.

Voices From The Street

Wells Fargo analyst Ike Boruchow said Farfetch provides a unique opportunity for retail investors to buy into an early stage e-commerce growth story with an incredibly long expansion runway ahead.

“At a high level, FTCH appears to be extremely well-positioned in the market today, as digital is beginning to transform the luxury space and there currently is not (but likely will need to be) a global platform for curated aggregation of the best luxury brands/retailers, while current platforms are not tailored to service the modern luxury consumer," the analyst said, referencing Amazon.com, Inc AMZN and eBay Inc EBAY. 

UBS analyst Eric Sheridan said Farfetch offers investors the perfect retail storm of technology, e-commerce and luxury.

“Against the backdrop of many of the themes that drive success for two-sided technology platforms, we see a rising penetration curve in the end market; momentum in the business in attracting [and] retaining consumers and suppliers; and growth momentum allowing a moat that is scaling around the business,” he said. 

Credit Suisse analyst Stephen Ju said Farfetch’s business is relatively insulated from competition from larger e-commerce names.

“While the competitive threat of larger operators that have greater resources is a concern of SMID-cap internet investors, given Farfetch's positioning in luxury, it should benefit from brand owners' greater desire to protect their image [and] equity and to control access to inventory." 

Ratings And Price Targets

• Wells Fargo initiated coverage of Farfetch with a Buy rating and $30 target.
• UBS initiated with a Buy rating and $28 target.
• Credit Suisse initiated with a Buy rating and $28 target.

Related Links:

IPO Outlook For The Week: E-Scooters, Drugs And Hotel Service

How Amazon's Ad Business Could Hit $22 Billion In 4 Years

Photo courtesy of Farfetch.