Ted Baker Share Price Forecast November 2021 – Time to Buy TED?

Shares of British luxury clothing retail company Ted Baker (LSE: TED)  are in the red today, closing at £112.7 as of November 26^th (17:52 GMT).  The shares have lost 95% over the past 5 years, but have recovered somewhat over the past 12 months.  Since the middle of November last year, it has increased by 13%.

Ted Baker – Technical Analysis

According to the financial statement released by Ted Baker, the market cap of the company is at £20.805 billion, with total assets worth £38.129 billion. Revenue for 2020 was at £35.20 billion with a profit margin worth -24.56% compared to £63.05 billion in 2019.

Oscillators for Ted Baker such as Relative Strength Index (14)(29.6), Stochastic %K (14, 3, 3)(7.4),  Commodity Channel Index (20(−128.2) and Average Directional Index (14)(14.2) are neutral.  On the other hand, moving averages such as Exponential Moving Average (10)(120.0),  Simple Moving Average (10)(119.8), Exponential Moving Average (20)(125.0) and Simple Moving Average (20)(127.4) are indicating a sell action.

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Recent Developments

Founded by Ray Kelvin in 1988 in Glasgow, Ted Baker is a British, designer-led, fashion brand. Along with its e-commerce business, it operates around 560 stores and concessions across the UK, continental Europe, North America and Asia. The company had posted positive second-quarter sales which were possible due to the trading momentum experienced following the reopening of its stores in the spring. According to the update, sales jumped 50% year on year during the 16 weeks to August 14. Revenues increased by 30% compared with last year, but remained 30% below the same period in 2019 before the world was hit by the coronavirus.

As Ted Baker and other apparel retailers are navigating a bumpy road back to normal, the increase in demand for office and party wear has grown. Ted Baker’s revenue from North America jumped by a third as COVID-19 vaccinations in Europe and North America has encouraged many workers back to return to their offices. Ted Baker is still repairing its image after former boss Ray Kelvin left in 2019 following misconduct allegations.

Should You Buy TED Shares?

Investors should look at the metrics from Ted Baker’s financial year for a better idea. Revenues were down 50% compared to 2019 levels, while net income also slumped from £47 million to a loss of £87 million. Despite this, sales increased by 50 % in the period covering the 16 weeks to 14 August and overall trading margins increased by 5% thanks to higher full-price sales. Management expects this trend to continue into the second half of 2022. The year will also feature the launch of a new e-commerce platform from the company which has previously been delayed. It is expected to be launched after the critical Christmas sales period. The company’s new collections for the Autumn/Winter offer have been positively received.

All the above are signs that Ted Baker is moving in the right direction. But investors have some risks as well. The company needs to return to growth over the next few years which can be a challenge. It is well known that Ted Baker initially struggled due to his lack of financial flexibility. The company needs strong balance sheets to weather potential periods of underperformance, especially in a sector where one season’s bad performance can break a company.

But Ted Baker has since improved after slashing costs and raising money from investors. Ted Baker shares could be worth multiples of their current value if sales increase at current levels but there are a lot of risks for the time being. Considering this now is not the time to buy Ted Baker shares.

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