Two FTSE 100 clothing retailers got boosted by broker upgrades this morning in the wake of recent trading updates.
Next Plc (LON:NXT) was the top blue chip gainer, up 2.5% to 4,438p as Investec Securities upped its stance to ‘buy’ from ‘hold’ while raising its target price to 4,750p from 3,900p.
The high street fashion firm has seen its shares rally nearly 5% higher this week having dropped by a similar amount last Thursday when Next reduced the upper end of its full-year profit and sales guidance after reporting a drop in first-quarter sales at the bottom-end of its range of expectations.
READ: Next shares drop as retailer cuts upper end of full-year guidance
Meanwhile, Citigroup turned bullish on high street discount clothing retailer Primark-owner Associated British Foods plc (LON:ABF) in a note on Global clothing retailers, also upgrading its rating to ‘buy’ from ‘hold’
The US bank’s analysts increased their target price for the FTSE 100-listed conglomerate to 3,400p from 3,000p, with AB Foods shares gaining 2.0% to 2,868p in early morning trading.
In a note to clients, Citigroup’s analysts said: “Primark has the credentials of a proven global growth retailer with an immature store portfolio.
“We expect a more stable forecast agenda and Primark valuation looks attractive following the -28% de-rating.“
Last month conglomerate AB Foods, which also owns a Food business, saw its first-half results beat market forecasts led by strength in its sugar business thanks to higher prices and currency factors.
READ: AB Foods sees profit beat forecasts
Primark's growth continued, with a revenue increase of 12% on a comparable basis with last year at constant currency.