The highly rated retail team at Shore Capital has restarted coverage of Next PLC (LSE:NXT) with a ‘buy’ rating and a price target of 11,500p, seeing 14% upside from current levels.
Its analysts describe the FTSE 100 clothing chain as one of the UK’s best multi-channel retailers, crediting CEO Lord Wolfson for its transformation into a business with strong brands, best-in-class operations, and high margins.
ShoreCap expects continued strong cash generation, forecasting a 5% dividend and buyback yield for 2025.
Growth is expected to come from international expansion and the Total Platform business, driving an annual sales increase of 4.6% between 2025 and 2028.
Next currently trades at 2.2 times sales, 10 times earnings before interest, tax, depreciation, and amortisation (EBITDA), and 14 times profits, making the valuation attractive.
With high margins in its UK business and solid growth prospects, ShoreCap sees Next as well-positioned for further gains.
In afternoon trading, the stock was changing hands for 10,080p.