Deutsche Bank has edged up its share price target for Next PLC (LON:NXT) after raising forecasts ahead of next week’s first-quarter trading update from the FTSE 100-listed retailer.
The German bank repeated a ‘hold’ rating on the stock while upping its target to 4,900p from 4,850p. In late morning trading, Next shares were changing hands at 5,204p each.
READ: Next's 2017 sales hit by consumer spending slowdown and online shift
In a note to clients, Deutsche Bank’s analysts said: “Despite the difficult start to the season for the UK clothing market, (Next) management was upbeat on the prospects for Q1 trading at the 23 March full year results, with a chart suggesting ambitions for 2-3% Brand full price sales in the first 14 weeks of the year.”
They added; “High frequency data since then has been volatile with more snow soon followed by a leap in temperature 'justifying' our first outing in shorts and flip flops.”
The analysts said: “Market share trends are encouraging, albeit Next is comping against range problems last year.”
They have increased their full year pre-tax profits forecast for the clothing and homewares stores group by 1% to £710mln, above the guidance mid-point of £705mln.
The analysts said earnings per share (EPS) estimates are slightly further boosted. to 1.6% growth this year, by the rapid pace of execution of the group’s budgeted buyback year-to-date.
They noted that on its forecasts, Next trades on 12.3 times calendar 2018 Prices Earnings with a 3.1% prospective dividend yield.