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(Sharecast News) - Citi reiterated its 'buy' rating on B&M European Value Retail on Friday as it said the stock's de-rating was overdone.
The bank noted that B&M has a 35% revenue and an over 50% profit share of the UK Variety Discount Retail market, which has seen easing competitive pressures recently.
"Whilst investor sentiment is understandably weak given -7% earnings revisions year-to-date, we view the de-rating as overdone and not commensurate with the earnings growth potential of a business that has structurally higher sales densities and quicker store paybacks post-pandemic," it said.
"In the context of potential supermarket price wars, we believe B&M's General Merchandise proposition may provide some margin protection, helping to stabilise earnings and so over time driving a re-rating."
Citi added that its lowered price target of 456.0p represents a 13x FY26 estimated price-to-earnings ratio.
RBC Capital Markets cut its price target on Burberry on Friday to 1,200.0p from 1,300.0p as it reduced FY26 EBIT estimates.
The bank noted that Burberry shares have been weak, reversing all post-H1 gains, likely reflecting the fact that Q4 retail LFL expectations were unlikely to show a sequential improvement, pushing back the potential recovery timeframe.
RBC cut its FY25 revenue estimate by 1% and its EBIT estimate to 5.2m from 5.7m. For FY26, it forecasts organic growth of 2% and 136m EBIT, which is 8% below its prior estimate.
The Canadian bank, which has an 'outperform' rating on the stock, said its estimates are 3% below consensus revenue and 17% below consensus EBIT for FY26.
"Whilst Burberry is early in its turnaround, we believe it is pursuing the right strategy and Autumn/Winter '25 collection should start to address its price architecture offering some retail LFL support," RBC said.
It added that the strategy update from chief executive Joshua Schulman with FY25 results should offer "incremental insight into progress and next steps".
Analysts at Berenberg hiked their target price on retailer Next from 12,600.0p to 13,400.0p on Friday, noting the stock appeared to be in "a mid-market sweet spot".
Berenberg noted that at Next's FY25 results meeting on 27 March, chief executive David Wolfson had pointed out that the firm had no "moat" - meaning that nothing in the business cannot be copied. However, Berenberg believes that building up a brand and business of Next's scale would take a long time.
Moreover, the German bank said Next's Total Platform - which offers end-to-end online selling services to brands and retailers, from website creation to delivery and returns - continues to be "unmatched" in the UK.
"Next is also fortunate in that it operates in the clothing and home mid-market sweet spot, which is relatively insulated from ultra-low-price competitors such as Shein and where the current trend is for consumers to seek better quality, even if they are buying fewer items," said Berenberg, which reiterated its 'buy' rating on the stock.
"Following the circa 11% rise in the share price in reaction to the increased sales and profit guidance that accompanied the full-year results, Next is trading on circa 16x price-to-earnings in the current year on our numbers, which is within its 20-year historical range of circa 6x to circa 18x."