NEXT plc is the major casualty in a wholesale downgrade of the retail sector by Deutsche Bank.
The bellwether of UK retail is moved to hold from buy with a target price reduced to 6,250p from 7,850p alongside downgrades for other household names.
Deutsche Bank believes that retailers currently are too optimistic about the impact of the consumer income squeeze on spending.
“Retailers are generally not painting a sufficiently bearish outlook on consumer demand or rising costs yet.
“The pain point is September in our minds as pent-up demand for holidays, travel, weddings and festivals starts to wane, cost of living pressures stack up and Christmas spend is coming into view.”
The bank said it would rather watch from the sidelines as the difference in perspective between investors and retailers, underlying consumer data and consensus forecasts all narrow.
New target prices are 1,850p (1,900p previously) for Associated British Food, Kingfisher 305p from 335p and Marks & Spencer 155p from 165p.