Asos (LON: ASC) shares closed Monday’s session down more than 3%, not helped by BofA re-rating the stock lower…

The firm’s analyst Geoffroy de Mendez double downgraded Asos to Underperform from Buy, lowering the price target to 350p per share, down from 725p. 

After the downgrade, Asos is now trading at 383.4p per share.

de Mendez told investors in a research note that the online fashion retailer’s balance sheet continues to be stretched even following the recent refinancing and equity raise. 

Asos reported a trading update for the three months ended May 31, in June. Revenue during the period declined 11% YoY. The company also said it put a plan in place to turn the business around by right-sizing its stock, generating cash, reducing net debt, and structurally improving profitability. 

By James Fyeman