Next remains firmly on the buy list at Jefferies after yesterday’s sales update.
Even with atrocious weather so far this year, the 5.7% sales hike was pleasing said the broker even without an upgrade to full-year profit expectations.
“The combination of the potential for stronger UK discretionary sales (with fashion showing the potential to better defend its share of UK consumer wallets, after many years of slippage, click here) and a better recognition of NXT's expanding TAM [total addressable market] should provide attractive earnings and valuation tailwinds.”
On an estimated 2025E P/E of 13 times, EV/EBIT of 9.6 times and free cash yield of 7.1%, 'buy' with a target price of 10,300p is the broker’s view.