Highlights

  • Citi updates recommendations across major UK retail and brand names.
  • RBC maintains underperform on Berkeley while raising its valuation target.
  • Berenberg lowers RWS target after reporting weaker annual financials.

Citi has issued a set of revised assessments for several UK-listed retail and consumer names, reflecting what it describes as a subdued macroeconomic backdrop heading into 2026. In its review, the bank highlighted Tesco as one of its preferred exposures within the sector, raising its target price from 460p to 510p and maintaining a buy recommendation.

The brokerage also upgraded Sainsbury (LSE:SBRY) from neutral to buy, lifting the price target from 333p to 349p. By contrast, Citi downgraded B&M European Value Retail to neutral from buy and adjusted its target to 165p from 215p. The bank noted expectations for just a 1.1% rise in discretionary spending capacity next year, alongside grocery inflation slowing to around 3%.

Citi’s update referenced potential pressure on value-focused discretionary retail, partly linked to the increasing adoption of consumer-to-consumer fashion channels. However, the European Union’s intention to close the de-minimis import loophole in 2026 may mitigate some of these pressures. The bank also commented on the UK’s business rates reform, indicating that the implications were less severe than initially anticipated, although tariff-linked supply chain impacts are likely to materialise in 2026.

In the housebuilding segment, RBC Capital Markets raised its price target on Berkeley from 3,700p to 3,900p, maintaining an underperform rating. The brokerage said its updated assumptions incorporate recent increases in Berkeley’s reported net asset value per share and insights from management guidance. RBC also noted that planning-related constraints and limited positive sentiment continue to shape the near-term environment.

Separately, Berenberg lowered its target on RWS Holdings (LSE:RWS) to 170p from 210p following the company’s full-year report. RWS posted revenues of £690 million, down 4% year-on-year, with adjusted pre-tax profit falling 43% to £60.4 million. Berenberg reiterated its buy rating, citing newly outlined medium-term goals centred on technology-driven service expansion and gradual profitability recovery.