Broker Highlights: Retail, retail and more retail...

On a very busy day in the retail sector, analysts have been working overtime to cope with the sheer volume of online and high street companies issuing trading updates covering the crucial Christmas and New Year period.

Key names to have updated the market include Marks & Spencer (LON:MKS), Tesco (LON:TSCO), SuperGroup (LON:SGP), AB Foods (LON:ABF), ASOS (LON:ASC), Booker (LON:BOK), Debenhams (LON:DEB), Mothercare (LON:MTC) and Dunelm (LON:DNLM), to name but a few.

It turned out to be a bumper Christmas for beleaguered Marks & Spencer after the clothing and homewares retailer reported better-than-expected results following several years of declines.

Nevertheless, today's trading update appears to have split opinion among City scribes, with some brokerages sticking with upbeat 'buy' ratings while others were content to remain at the opposite end of the spectrum by reaffirming 'sell' calls.

Peel Hunt, which rates the shares as a 'buy', reckons the company is back on track and commented: "Full price market share has been won for the first time in seven years.

"It's far too early for Steve Rowe to be lighting a celebratory cigar though: much remains to be done on product and fending off the competition. But the action that management is taking is beginning to gain traction with shoppers."

Meanwhile, Liberum maintained its 'sell' recommendation and said: "Today's Q3 update from M&S highlights the fact that its market continues to be squeezed, by fast fashion, online, brands and value. We fear that for M&S the outlooks gets tougher still."

The shares retreated from an early surge but were still almost 4 per cent higher by early afternoon.

In terms of wider consensus, Haitong Securities remained at 'buy', Shore Capital at 'hold' and Investec and Cantor Fitzgerald at 'sell'.

Debenhams shares also received a welcome boost, following its Christmas trading update, with the shares almost 5 per cent to the good by lunchtime.

Haitong commented: "We have a buy rating on Debenhams despite its potential vulnerability to tighter trading conditions because of the low valuation of its sales (EV/Sales 8/17E 0.32) and the combination of new management and aggressive shareholders."

Haitong has a 70 pence a share fair value on the stock.

In the supermarket space, Tesco failed to impress investors with its third-quarter and Christmas trading statement. Its shares were down around 2 per cent in early afternoon trading.

"Tesco stock still has fulsome recovery earnings multiples, the equity does not yet yield a dividend and on a pension and lease adjusted basis the solvency ratios are still high in an absolute and relative context," analyst Clive Black at Shore Capital explained.

"Accordingly, we see this as a good statement, albeit perhaps not good enough for the 'uber' bulls, and it leads us to reiterate our HOLD stance on the group's shares."

At 2:40pm:

(LON:DEB) Debenhams PLC share price was +2.73p at 57.08p

(LON:MKS) Marks Spencer Group PLC share price was +2p at 342.4p

(LON:TSCO) Tesco PLC share price was -3.4p at 205.4p