Deutsche Bank prefers Marks and Spencer Group PLC and B&M Value Retail SA to Next PLC (LSE:NXT) even after Next's recent profits upgrade.
It has tweaked its full-year profit forecast higher by 3% to £863 million. This comes after second-quarter sales beat expectations, with an overall increase of 6.9%.
Online sales saw robust growth of 10%, and retail sales grew by 2.2%, suggesting a possible reversal in the trend of consumers shifting from online to in-store shopping.
Despite these positive indicators and Next trading at approximately 12 times its 2024 price-to-earnings (PE) ratio, Deutsche sees more upside potential in M&S, given its ongoing business turnaround, and B&M, due to its new space and the benefit of trading down.
With a price target of £67 a share, the German bank rates the stock 'hold'.
Deutsche's note paints a nuanced picture of Next's current standing in the market.