“Next can thrive in these difficult times,” according to investment bank Stifel, which moved it to a 'buy' from a 'hold' rating, with a target price set at 6,500p.
Analysts believe its multi-channel, multi-brand offer and its profit margin and cash-flow discipline will allow it to thrive, despite shares in the FTSE 100 retailer being down 32% in the year so far,
This is despite UK confidence being close to record lows and the further decline in UK discretionary income forecasted.
Additionally, Stifel believes Next will trade through a recession as well as any, despite much of its 8mln customer base being hit hard due to higher interest and mortgage rates.
“Next has shown in the last 2008 recession how it not only bounced back in 2009 but had quadrupled by 2015, outperforming the FTSE 350 retail index by over 170% from 2010-2015,” the investment bank said.
Stifel also notes that Next has never been a company to chase growth at the expense of profit margins, making it more resilient than most retailers to withstand external shocks.