Next share price: Jefferies trims valuation ahead of Christmas trading update

Written by: Tsveta van Son
March 11, 2020

Jefferies has trimmed its valuation on Next (LON:NXT) ahead of the retailer’s Christmas trading update on January 3. Proactive Investors reports that the analysts argue that mild weather and a Brexit-induced weakness in consumer confidence are bound to have affected the retailer’s performance.

Next’s share price has slipped into the red in today’s session, having given up 0.41 percent to 4,097.00p as of 13:33 GMT. The stock is marginally underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.15 percent lower at 6,702.06 points. The group’s shares have lost nearly six percent of their value over the past year, as compared with about an 11.8-percent dip in the Footsie.

Jefferies trims valuation

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Jefferies reaffirmed Next as a ‘hold’ today, while trimming its price target on the shares from 5,600p to 4,600p. Proactive Investors reports that the analysts expect a three-percent cut to the fashion retailer’s full year pre-tax profit guidance of £727 million, arguing that recent comments from peers and industry data confirmed that the UK apparel market saw a solid October but a weak November.

Earlier this week, smaller London-listed peer Asos (LON:ASC) trimmed its sales growth and EBIT margin guidance earlier this week, pointing to ‘significant deterioration’ in trading.

“Whilst some big days of December trading are still ahead of us, we don’t expect the protracted softness which spilled into December to be recovered,” Jefferies commented, “Looking at the early months of 2019, much of the outlook continues to be dictated by what shape the Brexit discourse will take.”

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Other analysts on Next

The 19 analysts offering 12-month price targets for Next for the Financial Times have a median target of 5,400.00p on the shares, with a high estimate of 6,600.00p and a low estimate of 4,100.00p. As of December 15, the consensus forecast amongst 23 polled investment analysts covering the blue-chip retailer advises investors to hold their position in the company.

As of 13:36 GMT, Friday, 21 December, NEXT plc share price is 4,097.00p.