Superdry shares could see short-positions build, says IG analyst
The fashion retailer has seen sales struggle amid the Covid-19 pandemic, with its share price struggling to build bullish momentum amid fears of another lockdown in the winter months.
- Superdry set to unveil full-year earnings in September
- Fashion retailer could see short-positions build against it, says IG analyst
- Superdry strengthens balance sheet with new lending facility
The fashion retailer is expected to unveil its full-year results later this month, with investors eager for an update on the company’s performance after it was forced to pull out of its joint venture in China, costing it £6 million in write-offs.
‘I believe that China represents a huge opportunity for Superdry in the longer term,’ Superdry CEO Julian Dunkerton said. ‘As the way people are shopping there changes, it makes sense for us to shift our focus to the growth channels of online and wholesale.’
‘Combined with the improvements we are making to our product ranges, I am confident that this is the right time for us to take back full control of our brand in China and to re-position our operations in the region to deliver profitable future growth for Superdry,’ he added.
Superdry is trading at 163p per share at the time of publication, with the stock down 68% year-to-date.
Superdry secures new lending facility to strengthen balance sheet
Earlier this year, the clothing retailer announced that had agreed a new £70 million lending facility to help it strengthen its balance sheet amid the fallout from the coronavirus pandemic, which adversely impacted its sales.
‘The actions we have taken to date have greatly strengthened our cash position, which together with our new ABL Facility, give us the flexibility to execute our current plans and to secure our recovery,’ Dunkerton said.
‘Together, we are making our way through this unprecedented period, and I'm confident we can reset the brand and deliver on our transformation plans,’ he added.
Superdry: technical analysis
Superdry shares have seen their recovery from March stall of late; April’s peak at 176p remains a level that refuses to be broken on any sustained basis, according to Chris Beauchamp, chief market analyst at IG.
‘The brief bounce above here in early June was quickly rebuffed. At least support at 110p has continued to hold, but for now there seems little prospect of a move higher,’ he said.
‘As the shares approach the top end of the current range we may see bullish momentum ebb and a building of short positions,’ he added.
How to trade stocks with IG
- Create an IG trading account or log in to your existing account
- Enter ‘Superdry PLC’ in the search bar and select it
- Choose your position size
- Click on ‘buy’ or ‘sell’ in the deal ticket
- Confirm the trade
IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.
The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.
Please see important Research Disclaimer.
Seize a share opportunity today
Go long or short on thousands of international stocks.
- Increase your market exposure with leverage
- Get spreads from just 0.1% on major global shares
- Trade CFDs straight into order books with direct market access
Live prices on most popular markets
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.