Next was one of the few European retailers to get an upgrade as Deutsche Bank took a very gloomy view of the sector heading into 2024.
After a sunny 2023 for the sector, analysts at the bank see some “time in the shade” on the way with little in the way of catalysts for share prices.
“There is risk of a deflationary impact on the top line at the same time as wages, the biggest cost line for retailers, sees further upward pressure and mitigation opportunities are running dry.
“With global GDP growth expected to be c.2.5%, interest rate pressure on spending and employment combined with wider geo-political uncertainty we see Retail as set to have a much tougher year.”
Zara owner Inditex is downgraded to a sell as is H&M, though Next gets a target price hike to 7,700p and a ‘hold’ rating.
Shares in Next rose by 0.4% to 8,i42p.