KeyBanc analyst Noah Zatzkin reiterated Overweight on Farfetch Limited FTCH with a $13 price target. Zatzkincame away from FTCH's Capital Markets Day feeling the same about the company's long-term opportunity.
As expected, FTCH provided additional detail around the economics of FPS vs. marketplace, provided further clarity around FY23 guidance, and looked forward to FY25.
While Zatzkin thinks management could have arguably more clearly laid out the timing and financial impact of the individual deals through 2025 (including 2024), he believes the additional detail provided did add clarity and, in general, was encouraged by additional disclosure during Capital Markets Day.
Zatzkin writes the valuation is compelling given FTCH's unique positioning in the luxury ecosystem and LT growth and profitability opportunity.
JP Morgan analyst Doug Anmuth had an Overweight with a $15 price target.
FTCH's Capital Markets Day was mixed as the company laid out a compelling case for its leading global luxury industry platform. Still, its financial outlook through 2025 fell short of some expectations for both GMV and EBITDA.
On the platform, FTCH provided much-needed transparency across Marketplaces, Platform Solutions (FPS), and Brand Platform. FTCH's 3-year outlook through 2025 for $10 billion of GMV and 10% EBITDA margin is below some expectations, but he believes it is achievable.
Anmuth said the 35% sell-off yesterday is overdone and creates an attractive entry point.
Wedbush analyst Tom Nikic had a Neutral rating and cut the price target to $6.00 (from $8.50). FTCH hosted their long-delayed Investor Day, giving incremental details about their highly-complex business while providing initial FY23 guidance and a 3-year outlook for FY25.
While buy-side expectations were tough to gauge, it seems clear that the outlook disappointed, as shares traded down 35% on the day. While the outlook was not as robust as expected, he could see a partial recovery in the shares.
Given a greater-than-expected contribution from new partnerships next year, he raised his FY23 adjusted EBITDA forecast and cut his price target.
Price Action: FTCH shares traded higher by 4.17% at $5.75 on the last check Friday.
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