Boohoo Group PLC (AIM:BOO) kept its buy status from broker Liberum as it remains optimistic over the online retailers long-term potential.
It has dropped the target price, however, from 320p to 200p.
The company slashed its profit expectations last week, citing several factors such as a higher number of product returns and inflated supply chain costs as the reason.
Liberum believes these issues will persist for at least the next 18 months and therefore cut its earnings forecast for the next two years by more than 40%.
It also believes the company will have to increase its investment in the American and European markets to make up for lost ground.
However, the broker remains optimistic that the online retailer can turn it around, excited by developments in the Debenhams opportunity as well as believing the US success of Shein, the Chinese fashion retailer, can only be good news for boohoo.
READ: Boohoo still has some supporters as Deutsche Bank repeats ‘buy’ advice
Last week, Deutsche Bank also repeated its ‘buy’ advice suggesting the reasons for the profit warning might prove to be only temporary.
Shares dropped 1% to 116p.
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