Away from the banks and the miners for a moment, high street chain Next has been undermined by a couple of brokers' notes.
Shares in the company, which releases its final results on March 19, slipped 32p to £13.07, a far cry from the £22 they touched at the end of October.
Today Panmure Gordon has repeated its sell advice and cut its price target from £13 to £12.
Over to Panmure analyst Philip Dorgan: "We don't believe that Next's ranges are good enough to meet current market expectations in a toughening retail environment.
"February has been a graveyard for UK retailers, particularly for the clothing sector. We also don't think that an early Easter will be helpful. Blink and it will be gone. We are therefore downgrading our pre-tax forecasts for Next once again. For the year to
January 2009, we are reducing from £430m to £377m. This compares with consensus of £482m.
"Next has been a highly cash generative company, which has helped to finance its share buyback programme: over the last six years it has spent over £1.5bn. Lower profit expectations mean lower cash flow and we believe that the buyback programme will end once its current contract finishes. The cost of debt is rising and Next will not want to risk a debt downgrade."
On top of that, in a 41-page note on the European retail sector Goldman Sachs has removed Next from its so-called conviction buy list. To be fair, Goldman still rates the shares a buy overall but explains: "The stock remains undervalued given the group's profitability and return profile but we see more upside potential in other stocks in our coverage universe, hence we are removing it from the conviction list. We also believe the negative sentiment in the UK retail environment is likely to cap upside in the short term."
