Next PLC (LSE:NXT) could generate close to half its sales overseas within a decade, according to RBC Capital Markets, which raised its price target on the clothing retailer to £163 from £160.
The Canadian bank reiterated its 'outperform' rating and set a bull case of £177 a share, citing international momentum and a potential entry into the United States.
RBC expects Next to begin selling on Amazon in the US with a small test range in kidswear, mirroring an expansion in Europe that has already moved past its trial phase.
Amazon accounts for around 40% of all clothing sold online in the US, and RBC thinks Next can build scale there without heavy investment in physical stores.
International exposure sits at roughly a quarter of sales now, and the bank sees that rising above 40% over ten years, helped by tie-ups with Google, Meta and online aggregators such as Zalando.
The analysts nudged up earnings forecasts on stronger online sales and an improved costs outlook, pointing to a lower oil price and fading UK wage pressures.
RBC now expects Next to beat its profit guidance of one thousand two hundred and eighteen million pounds this year, forecasting pre-tax profit of one thousand two hundred and forty-one million pounds.
A question also hangs over the retailer's cash returns, with Next scheduled to buy back just over five hundred million pounds of shares in the current year.
The share price of about £145 sits well above the £132 limit the company has previously set for buybacks, so RBC thinks Next may switch to a special dividend or another form of capital return.
Next trades on 16.5 times calendar 2027 earnings, high for a UK retailer but modest against international peers such as Inditex on 23 times and Uniqlo owner Fast Retailing on 44 times.
RBC argues that a re-rating to 20 times would imply a share price of £177 as the international story matures.
Risks include a de-rating if confidence in overseas growth fades, alongside a weaker UK consumer or a stronger dollar, given Next buys mostly in the US currency.
