Analysts at Shore Capital do not expect further forecast upgrades from Next PLC (LSE:NXT) as a result of its half-year results released this coming Thursday.
Seeing the shares as fairly valued at current levels, Shore Cap maintained its 'hold' rating on the stock but suggested that the market will be keeping an eye on what the retail bellwether's results reveal about UK consumer and economic outlook.
Investors will also be looking out for any information regarding the implications of last Friday’s mini-budget.
Three key trends will shape the remainder of the year for the FTSE 100 retailer, Shore Capital said.
Firstly, it sees physical clothing stores are "back in vogue" for consumers, a trend captured in the news from Boohoo’s over the weekend that it is cancelling orders with suppliers, while other digital natives are flocking to open stores.
Moreover, the broker noted that those retailers with multichannel offerings such as Next will be “more competitive than online pure players".
Second, although spending in clothing stores is down 6% on a three-year basis, Shore Cap said Next is enjoying greater market share as competitors close shops due to the pressures of inflation.
Finally, "it will be interesting to see" the extent to which Next has protected consumers by not passing on costs, despite the strong demand for its mid-range apparel generally allowing it to push through cost inflation.