Boohoo Group PLC (AIM:BOO) has been downgraded to sector perform by broker RBC as it believes it is falling behind competitors in the international markets.
Its target price is also reduced, to 150p from 330p.
The broker outlines a “lack of confidence in its top-line recovery,” with the online fashion firm falling behind its peers on the international market.
RBC said the longer it continues to fail to appeal to the markets outside the UK, the more investment will be required further down the line to win back customers.
While it forecasts small top-line revenue growth for the upcoming financial year, it is still 6-9% below consensus.
It also mentions that Boohoo has failed to return to pre-pandemic levels of service, with delivery times still much longer and much more expensive compared to its competitors such as Shein, who offer half the delivery time at cheaper costs in the US.
RBC forecasts that investments in overseas infrastructure, improving the service proposition and regaining market share will mean it will fall short of the adjusted underlying earnings margin previously set at 10%.
Shares in Boohoo have remained steady in mid-afternoon trading, changing hands at 98p.
Read More: Boohoo Group PLC downgraded as it falls behind competitors