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Next share price: Berenberg no longer bearish on retailer

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Berenberg has lifted its rating on Next (LON:NXT), arguing that the group’s guidance for sales growth of 1.7 percent and a one-percent decline in pre-tax profit for full-year 2019/2020 is ‘reasonable,’ Proactive Investors reports. The comments came after the blue-chip retailer updated investors on its performance last week, reporting that its sales had increased over the important Christmas period, while trimming its full-year profit guidance.

Next’s share price extended its gains on Friday, adding 2.94 percent to close at 4,478.00p, and marginally outperforming the broader market rally. The group’s shares have given up about 5.7 percent of their value over the past year.

Berenberg lifts stance on Next

Berenberg hiked its rating on Next from ‘sell’ to ‘hold’ on Friday. Proactive Investors quoted the analysts as saying in a note to clients that the year ahead for the blue-chip retailer was “difficult to predict, with upside risk following an annus horribilis for UK retail, but downside risk from continued Brexit uncertainty and the ongoing structural shift of sales online”. As a result, the broker reckons that the FTSE 100 group’s guidance is ‘reasonable’.

In the near term, Berenberg believes that Next’s third-party products business will continue to benefit from the demise of department store peers, while in the longer term, they expect another year of poor store like-for-like growth to provide further support for its view that a store estate restructuring is required, paired with a shift to free home delivery.

Other analysts on FTSE 100 retailer

The 19 analysts offering 12-month price targets for Next for the Financial Times have a median target of 4,850.00p on the shares, with a high estimate of 6,370.00p and a low estimate of 3,967.00p. As of January 5, the consensus forecast amongst 23 polled investment analysts covering the FTSE 100 retailer advises investors to hold their position in the company.

As of 08:10 GMT, Monday, 07 January, NEXT plc share price is 4,478.00p.

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