Next share price surges ahead of trading update

Written by: Tsveta van Son
March 11, 2020

Shares in Next (LON:NXT) have jumped this morning, ahead of the group’s trading update tomorrow when the blue-chip retailer is set to kick off the 2019 reporting season for FTSE 100 companies. The Christmas update will follow last month’s profit warning by smaller London-listed peer Asos (LON:ASC).

As of 09:17 GMT, Next’s share price had added 1.68 percent to 4,058.00p, outperforming the broader market selloff which has seen the benchmark FTSE 100 give up 1.22 percent to 6,646.22 points. The group’s shares have lost just under 10 percent of their value over the past year, as compared with about a 13.2-percent dip in the Footsie.

Next to update on trading

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Next is due to post its Christmas update tomorrow and Proactive Investors reports that UBS estimates sales will rise one-percent in the fourth quarter, which includes the Christmas trading period.

“If this is the full price sales outturn, we would not expect much change to full-year pre-tax profit guidance, currently standing at £727 million,” the analysts pointed out. “There could be modest upside risk in that Next is likely to have assumed higher clearance costs for the second half as well as in the first half, although the actual first half outturn was an improvement.”

The broker said that if the FTSE 100 retailer delivered a pre-tax profit of £727 million, this would be three percent above the central guidance given at the start of 2018. 

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Analyst ratings update

The 19 analysts offering 12-month price targets for Next for the Financial Times have a median target of 5,300.00p on the shares, with a high estimate of 6,600.00p and a low estimate of 4,100.00p. As of December 29, the consensus forecast amongst 23 polled investment analysts covering the retailer advises investors to hold their position in the company.

As of 09:54 GMT, Wednesday, 02 January, NEXT plc share price is 4,070.00p.