Financial Trading Blog
Stock of the day 04/01/2015 – Next PLC
After crossing the £80 mark back in August (before that month’s China-inspired chaos got in the way) it took Next a while to get back to those highs, finally hitting the big 8-0 at the start of November. It first had to overcome, however, a slightly shaky set of third quarter figures at the end of October.
(Source: IT-Finance.com 04/01/2016)
Whilst full-price sales increased by around 6% for the 3 months to October 24th (besting the 3.5% half year growth seen in September and arriving in the middle of the company’s own guidance range) Next tempered expectations with a warning to investors that customer demand remains volatile. The relative strength of Next’s figures (especially compared to rival Marks & Spencer) ensured that investors didn’t take the caution too calamitously, something helped by the fact that the company (slightly) raised its full year sales and pre-tax profit forecasts.
This allowed the stock to touch the aforementioned £80 mark as it headed into November, a wobble across the rest of that month then giving way to a fresh intraday high on at the start of December, Next’s stock tickling £81.78. Yet it soon fell back below the £80 mark, a fall that only accelerated as the year drew to a close, reports of a dismal Christmas for the high street seeing Next plunge all the way to a current trading price of £71.93 (IT-Finance.com, 04/01/2015), just above the 7 and a half month lows struck over the holiday period.
Yet in terms of its Q4 figures on Tuesday, Next is expected to have outperformed the struggling sector it finds itself in; despite high street footfall 1.8% lower for the Christmas period, analysts are still forecasting a 4% rise in sales (admittedly, a drop off from last year’s figures).
Next PLC has a consensus rating of ‘Hold’ with an average target price of £75.17.
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