Shares in Next edged around 1% higher after the FTSE 100 clothing and homewares retailer raised its full-year profit guidance for the second time since August.
Deutsche Bank welcomed the upgrade as a surprise, but kept its 'hold' rating and 16,000p price target, judging the shares fairly valued after the run.
The bank lifted its full-year pre-tax profit guidance by £12 million to £1,255 million, an increase of about 1%, taking growth for the year to 8.4%.
Of that, £5 million came from higher expected sales and £7 million from better-than-anticipated cost savings, largely in warehousing.
International does the heavy lifting
The standout, once again, was Next's overseas business, where first-half sales jumped 26.4% and profit rose 23.4%.
On the back of that, the retailer raised its full-year international sales growth forecast to 20.5%, adding roughly £40 million of sales.
Analyst Adam Cochrane noted the strength was tempered by a weaker UK outlook, with second-half domestic growth trimmed to 2% from 2.8%, the first such cut in some time.
Solid first half
First-half figures came in modestly ahead of expectations, with sales up 9% to £3,540 million and pre-tax profit up 10.5% to £569 million.
Earnings per share climbed 12.2% to 370.4p, comfortably beating the bank's own forecast.
Within the divisions, the Label online arm, which sells third-party brands, grew sales 14%, while the core UK Next brand online business managed just 2%.
Fairly valued
Deutsche Bank expects modest upgrades to market forecasts following the guidance increase.
But with the stock trading on around 17 times forecast 2027 earnings, the bank sees limited further upside.
Cochrane said the surprise upgrade should nudge the shares higher on the day, a call the market duly bore out.
