Next PLC (LSE:NXT) has had its price target upgraded by Deutsche Bank following a stellar Christmas trading period as revealed on Thursday.
Analysts at the German bank have kept the stock on its ‘hold’ rating but upgraded its share price target from 7,700p to 8,000p – just under a 5% decrease from the current 8,360p price.
“Next has delivered its 5th profit upgrade for FY24e and topped this with an initial view of FY25e PBT that is c.1% ahead of consensus,” Deutsche Bank said.
However, it remained cautious over the fact a large part of the pre-tax profit growth is coming from “acquisitions and definitional changes”, which the bank says makes it harder to analyse or warrant a multiple expansion.
Looking at the short term, Deutsche Bank says Next is being rewarded by investors for its consistency of earnings in the face of a sector which is seeing numerous material downgrades.
“We upgrade our FY25e PBT by 4% to £960m (but before the £19m of amortisation add back) compared to the company guidance of £941m given our Brand sales of 3.5% is 1ppt ahead of guidance,” the bank added.