RBC Capital Markets has raised its price targets for B&M European Value Retail SA (LSE:BME) and Currys PLC (LSE:CURY), citing evidence that international fashion retailers are becoming more aggressive on homewares pricing.
The broker's twice-yearly UK homewares survey found that Zara and H&M have become notably more price competitive this season, despite traditionally pricing at a premium in the category.
RBC increased its price target for B&M, the discount retailer, to 275p from 240p, while maintaining its "outperform" rating.
The broker raised its earnings per share forecasts for B&M's 2027 and 2028 financial years by 2% to 3%, citing improving like-for-like sales and margins.
RBC said B&M's "back to basics" turnaround plan was working, with product availability improving to around 94%, up from the mid-80s percentage range before the current chief executive took over.
Separately, RBC reiterated its "outperform" rating on Currys, the electricals retailer, raising its price target to 190p from 185p ahead of its trading update on Thursday.
The broker said consensus forecasts for like-for-like sales growth of 2% across the UK and Nordic region looked too conservative, citing strength in televisions, laptops and newer categories such as cooling devices.
RBC also pointed to Currys' share buyback programme, noting the company had been purchasing shares at 160p, above the current trading price, which it interpreted as a sign of management confidence.
Temu remained the cheapest retailer overall in RBC's survey, while John Lewis had become notably less price competitive year on year.
