Panmure Gordon has retained its 'hold' recommendation and 118p target price for department store group Debenhams ahead of its trading statement on Tuesday.

During 2012, Debenhams rocketed 94.7% owing to share buy-backs and a stronger-than-expected top-line performance driven mainly by online sales, Panmure noted in a research report on Monday morning.

The broker said: "Ahead of the Christmas trading statement, due Tuesday January 8th, we remain holders. However we warn that in view of the stock's performance, the slightest slip up here will be heavily punished."

Even in the first week of trading in 2013, shares have already risen over 3%. Panmure reckons that this is down to Next's better-than-expected trading statement last week.

However, the broker said: "our assessment is that Debenhams was more promotional than anticipated in the run up to Christmas. This was despite Christmas stock levels being 'tight as a drum', per management."

Panmure said it saw some "rather deep" levels of discounting in the peak trading week before Christmas - "50% was not uncommon".

Shares were trading broadly flat on Monday morning.

BC

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