Yoox collapses to the bottom of the Ftse Mib with a drop of almost 6% to 19,58 euros per share, the lowest since July 2013. The title pays for the move by Goldman Sachs which removed it from its "Pan European conviction buy list ”, i.e. the list of preferred stocks by the business house in Europe.
The reason? Turnover will "only" grow by 20-25% compared to the previous euphoric expectations of +27%-30%. The new forecasts of the US giant indicate 2014 revenues of 544,6 million euros from 455,6 million in 2013, an Ebit up to 35,7 million (from 27,6 million in 2013) and profits of 18,4 million ( from €12,6 million in 2013), with earnings per share at €0,36 (from €0,27 in 2013).
And so the target price cut was triggered, which was reduced to 29 euros from 38,5, about 24% less. For the investment bank it is now possible to find higher yields elsewhere. On the other hand, the title has already galloped beyond belief: since March 2011, when Goldman Sachs added it to its Conviction buy list, it has scored approximately +120%. In the meantime, the company founded in 2000 by Federico Marchetti and landed on the Stock Exchange at the end of 2009, has earned the honors to migrate among the blue chips of the Ftse Mib (at the end of 2013), the basket that includes the companies with the highest capitalization and liquidity of the Milan stock exchange.
Yet the new target price, heavily cut, still implies a rise in the stock by as much as 46% (which generally indicates the target achievable by the stock over a 12-month horizon). And Goldman Sachs analysts maintain their buy judgment, deeming that Yoox's valuation is still attractive. “We expect – they say – that this year's growth will come more from the second half thanks to the reduction of the turbulence on exchange rates, the management's guidance on marketing expenses and the effects of the improvement of mono-brand brands”. The main downside risks are execution errors, increased competition, margin pressure and the loss of a major mono-brand contract.
Goldman Sachs is not just any analyst in this case. He is also the broker who brought the fashion e-commerce company to the Stock Exchange in 2009. The other institute coordinating the offer is Mediobanca which a few days ago reiterated the positive recommendation on the stock to offset the sales triggered by the profit warning of the British competitor Asos. On that occasion, Mediobanca specified in a note that Yoox was very different from Asos: while the latter specializes in cheaper items, Yoox focuses on luxury and has a wider range of products. In other words, the company will continue to boast growing accounts and for Mediobanca the market has been too severe. The index shows the recent performance of the stock which lost 28% in the last six months. However, the performance of the last 12 months remains positive at +24%. For now, after so much racing, those involved in technical analysis underline that since mid-March Yoox has been in a downward trend which risks continuing and which could only be averted if the 23,9 level is exceeded.
