MARKET TALK: RBS Initiates Coverage Of UK General Retailers

7th Jul 2010 07:55

0655 GMT [Dow Jones] Royal Bank of Scotland initiates coverage of UK general retailers, with a cautious stance. Expects the sector to come under consumer spending, cost and margin pressure, as austerity measures dampen confidence. Starts Home Retail Group (HOME.LN) at hold with 214p price target, saying UK macro headwinds for both Argos and Homebase are negative. Start Next (NXT.LN) at hold with 1989p price target, saying that while cash flow, dividend growth and share buybacks are supportive, two consecutive years of EPS downside are likely. Starts Marks & Spencer (MKS.LN) at sell with 333p price target, citing declining returns, greater competition and a stretched balance sheet. Starts Kingfisher (KGF.LN) at buy with 208p price target, saying it's the highest-quality restructuring play within RBS's UK retail universe. ([email protected]) Contact us in London. +44-20-7842-9464 [email protected] (END) Dow Jones Newswires July 07, 2010 02:55 ET (06:55 GMT)