Analysts Bullish On Farfetch After September IPO

After a tremendously successful September IPO, shares of online luxury retailer Farfetch Ltd (NASDAQ: FTCH) have cooled in the past month. Sell-side analysts were weighing in on the stock now that the quiet period has expired, which gave the shares a boost.

Here’s a sampling of what analysts had to say.

Voices From The Street

Wells Fargo analyst Ike Boruchow said Farfetch provides a unique opportunity for retail investors to buy into an early stage e-commerce growth story with an incredibly long expansion runway ahead.

“At a high level, FTCH appears to be extremely well-positioned in the market today, as digital is beginning to transform the luxury space and there currently is not (but likely will need to be) a global platform for curated aggregation of the best luxury brands/retailers, while current platforms are not tailored to service the modern luxury consumer," the analyst said, referencing Amazon.com, Inc (NASDAQ: AMZN) and eBay Inc (NASDAQ: EBAY). 

UBS analyst Eric Sheridan said Farfetch offers investors the perfect retail storm of technology, e-commerce and luxury.

“Against the backdrop of many of the themes that drive success for two-sided technology platforms, we see a rising penetration curve in the end market; momentum in the business in attracting [and] retaining consumers and suppliers; and growth momentum allowing a moat that is scaling around the business,” he said. 

Credit Suisse analyst Stephen Ju said Farfetch’s business is relatively insulated from competition from larger e-commerce names.

“While the competitive threat of larger operators that have greater resources is a concern of SMID-cap internet investors, given Farfetch's positioning in luxury, it should benefit from brand owners' greater desire to protect their image [and] equity and to control access to inventory." 

Ratings And Price Targets

• Wells Fargo initiated coverage of Farfetch with a Buy rating and $30 target.
• UBS initiated with a Buy rating and $28 target.
• Credit Suisse initiated with a Buy rating and $28 target.

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Photo courtesy of Farfetch.