Next PLC (LSE:NXT) is on course to be a “clear winner” in the retail sector, according to Liberum analysts, as its multi-channel platforms continue to drive structural growth.
Omnichannel retail, a mix of online and physical shops, is the “right model,” Liberum said, allowing the likes of Next and Mike Ashley's Frasers Group to enjoy higher margins than counterparts which just operate one or the other.
Liberum rated Next a ‘buy,’ giving the retailer a target price of 7,500p, up from 6,902p on Thursday.
“The structural dynamics of clothing retail are shifting in Next’s favour and the group should continue to win market share,” analysts said.
“Brands (such as Superdry) are lining up to sell on platforms like Next,” they added, as its online offering looks poised to take share from competitors like Boohoo and Asos.
Next’s acquisitions of struggling brands, including Made and Joules in the past year, is also set to drive growth, delivering “scale and leverage opportunity,” the investment bank added.
Liberum forecast Next’s total sales will reach £4.8bn in 2022 and pre-tax profit £898mln, with the retailer’s generally “conservative” guidance having indicated sales of £4.5bn and profit of £860mln in a January update ahead of its full-year results due on 29 March.