Jefferies analyst Andrew Wade maintained a Buy rating on AO World (AO – Research Report) today and set a price target of p150.00.
Andrew Wade has given his Buy rating due to a combination of factors that highlight AO World’s strong market position and growth potential. One of the key reasons is the company’s clear confidence in achieving its medium-term targets, which include a notable 10% annual growth in B2C revenue and a profit before tax margin of 5-8%. AO World is already operating at a margin of over 4%, excluding MusicMagpie, and with strong margins on additional MDA revenues, there is an expectation that the company will aim for the higher end of its margin target.
Another significant factor in Wade’s rating is the emphasis on AO World’s Membership program, AO Five Star, which is a major driver of the company’s top-line growth plans. This program is instrumental in enhancing customer loyalty, increasing the share of wallet, and expanding non-MDA growth. Additionally, AO World’s exceptional customer service, as evidenced by its high Trustpilot rating of 4.9, further supports the company’s strong market reputation and customer satisfaction, contributing to Wade’s positive outlook on the stock.