Not Yet Enticing Enough

Research evidence excerpt

Not Yet Enticing Enough

EUROPE | General Retailers EquityJulyResearch22, 2026

KEY STOCKS FEATURED INCLUDE:Not Yet Enticing Enough

Our analysis of the key budget inputs for UK/European consumers shows TICKER RATING PRICE TARGET

little reason why there should be a significant upswing in spending into MKS LN BUY 460.00p

H2. This top-line picture is compounded by emerging COGS pressure (if ZAL GR BUY €35.00

modest). We therefore find it hard to argue that investors will re-engage ABF LN UNPF 1,650.00p

in these European non-food retailers in the near term. We continue to NXT LN HOLD 14,500.00p

argue that the bottom-up merits of MKS and ZAL should make them PNDORA DC HOLD DKK700.00

outperformers, with ABF the underperformer.

Will investors come back to consumer? A dearth of optimism around the European consumer KEY CHANGES INCLUDE:

has compounded the opportunity cost of overweight positions in consumer discretionary over

TICKER RATING PRICE TARGET

the last few months (eg given more enticing AI opportunities coming to market). Our outlook

for consumer spending, bottom-up cost structures, and valuation within our EU retail coverage MKS LN BUY 460.00p (440.00p)

leads us to question whether there will be a top-down regross into the sector. Instead, we ZAL GR BUY €35.00 (€31.00)

continue to prefer bottom-up earnings and valuation plays. NXT LN HOLD 14,500.00p (14,000.00p)

We update our UK consumer cash flow - and extend the analysis to Europe. We see slowing PNDORA DC HOLD DKK700.00 (DKK650.00)

wage growth, rising unemployment, and elevated cost pressures making for a challenged end

to 2026, leading us to forecast 0.6% UK growth in FY27 (vs 1.9% in Dec, after 7.7% in FY26).