UBS upgrades N Brown, expects growth to pick up

16th Jul 2014 10:24

UBS has raised its rating for retailer N Brown from 'neutral' to 'buy', saying that the business offers "online growth at a high street price"."N Brown has de-rated significantly in the last few months. With trading expected to improve in the second quarter we think this has been overdone and investors will re-engage with the stock once it prints better like-for-like (LFL) sales," the bank said.Analysts predict LFL growth will accelerate to 5% in the second quarter from 2.5% in the first three months of the year, before rising to 9% in the second half and around 10% for the next financial year.A change in momentum and the re-launch of N Brown's JD Wiliams brand for plus-size clothing should spark a re-rating of the shares, UBS said as it lifted its target price for the stock from 485p to 490p."Although most retailers are facing a potential interest rate shock, the low home ownership amongst the core customer base and some older customers enjoying a better savings rate may even see N Brown a beneficiary of an interest rate rise."The stock was 3.6% higher at 423.1p by 10:20 on Wednesday.BC