Next PLC share price sits at its all-time high: it’s still a bargain

Next PLC (LON: NXTL) share price has done well over the years, making it one of the best-performing UK retailers this year. It has soared to a record high of 9,300p, up from its all-time low of 1,702p.

Next PLC is doing well

Next PLC, one of the UK’s retailers, has surged by over 15% this year, outperforming the FTSE 100 and FTSE 250 indices. 

This performance happened as the company continued seeing strong revenue and profitability growth. Its recent annual report showed that its total revenue soared to over £5.8 billion in 2023, u from £5.5 billion a year earlier.

At the same time, its profit before tax rose to £918 million from the previous £875 million while its earnings per share rose to 578.8p. This performance happened as other British companies like Boohoo and Asos went through major challenges.

Next’s growth has continued in the past few months. Its recent trading statement showed that its total product sales rose by 5.7% in the last quarter. It expects that its full-year sales will be over £4.9 billion while its profit before tax will be about £960 million.

Analysts believe that the company is still undervalued. It has a market cap of over £11.8 billion and a price-to-earnings (PE) ratio of 11.8. This ratio is much lower than the FTSE 100’s 18.9. 

Next is also lower than Marks and Spencer’s multiple of 14.8 and Tesco’s 19.6. Similarly, TJX, a leading American retailer, has a multipe of about 24x.

This explains why analysts and investors have a bullish rating on the stock. For example, MFS Meridian Funds, one of the best-performing European hedge funds, has invested in the company.  Analysts at Jefferies, Barclays, and RBC have a bullish rating on the stock. 

Also, a DCF valuation calculation shows that the company was trading at a 7% discount to its fair value. Therefore, there are chances that Next could become a takeover target as demand for UK companies rise.

Next share price forecast

NXTL chart by TradingView

The daily chart shows that the Next PLC stock price has been in a strong bull run since going public. It has soared from 1,702p to over 9,000p as it continued growing in the UK, Europe, and the United States.

The stock has jumped above the 50-day and 25-day Exponential Moving Averages (EMA), meaning that bulls are in control. Also, the MACD indicator has remained above the neutral point while the Relative Strength Index (RSI) has moved sideways.

Therefore, the stock will likely continue rising as buyers target the next key resistance point at 1,000p. The key risk is that it has formed a rising wedge pattern, which is a popular bearish sign in the market.