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Next share price: Shore Capital sees retailer as ‘fairly valued’

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Shore Capital continues to see Next (LON:NXT) as a ‘hold,’ arguing that the blue-chip retailer remains ‘fairly valued,’ Citywire reports. The comments came after the FTSE 100 group updated investors on its interim performance yesterday, and hiked its full-year guidance.

The upbeat results sent Next’s share price rallying in the previous session, with the stock gaining 7.69 percent to 5,518.00p. The shares lent support to the benchmark FTSE 100 index which added 49.15 points to close 0.66 percent higher at 7,507.56.

ShoreCap sees Next as ‘hold’

Shore Capital reiterated its ‘hold’ rating on Next yesterday as the blue-chip retailer posted a rise in interim sales and hiked its full-year guidance. The company had previously warned of losses in August, which, however, did not materialise.

“The dividend yield of three percent and the strong cashflow generation reflected in the free cashflow yield of 12 percent provides support to the share price,” the broker’s analyst Greg Lawless commented, as quoted by Citywire, adding that Next remained “a well-managed company with tight cost and stock control”.

“We continue to believe that the shares remain fairly valued for now but the shares should be in focus with the slightly upgraded guidance,” the analyst pointed out.

Other analysts on retailer

Reuters meanwhile quoted UBS as commenting that it was  “still too early to measure whether Next is gaining share as a result of retrenchment by other mid-market apparel retailers, although we expect this to be a growing feature in the medium term”.

UBS reiterated its ‘buy’ rating on Next yesterday, without specifying a price target on the shares, while Liberum continues to see the company as a ‘hold’. According to MarketBeat, the blue-chip retailer currently has a consensus ‘hold’ rating and an average price target of 4,961.82p.

As of 08:05 BST, Wednesday, 26 September, NEXT plc share price is 5,518.00p.

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