Next PLC’s (LON:NXT) solid Christmas trading update has been lauded by analysts as a reassuring performance in tough conditions, however, some have raised doubts as to whether the group’s peers will have fared as well in the festive season.
“Next has delivered a relatively upbeat trading statement in tough trading conditions in the golden quarter… In our view, this shows both the relevance of the customer proposition and the strength of the capable management team”, said analysts at broker Shore Capital, who rate Next at ‘hold’.
READ: Next hikes full year profit guidance as Christmas trading beats forecasts
However, the broker added that they did not expect “many earnings upgrades” for the festive trading season and said risks were the sector were on the downside despite Next’s strong start to the reporting schedule.
This view was echoed by Emily Salter, retail analyst at GlobalData, who said that while Next’s performance was “impressive” over a year “characterised by high levels of economic uncertainty”, it was unlikely the company’s peers will have fared as well.
The brokers also didn’t expect Next to improve much further, with Peel Hunt retaining its ‘hold’ rating and 7,000p target price, saying it was “not wise to chase the shares” despite the sold trading.
The outlook for other retailers was similarly gloomy, with Joe Healey, investment research analyst at The Share Centre, saying the sector was “still likely to face a difficult 2020” amid macroeconomic factors and unseasonal weather.