Financial Trading Blog
Stock of the day 27/10/2015 – Next PLC
Will the company continue to be on trend, or will it suffer a fashion faux-pas, with its third quarter results on Wednesday?
Next has coped quite well given the market turmoil of the past few months. Beforehand the company had been on a bit of a tear; barring a dip at the start of June Next went on a run that culminated in an all-time high of £81.65 on the 19th August. However, the Chinese-chaos that was just around the corner soon took the stock away from these highs, with Next falling back below the £78 mark (and in the direct aftermath of Black Monday hitting a recent nadir of £72.90).
(Source: IT-Finance.com 27/10/2015)
Its stellar half year results on September 10th helped it (largely) hold above £75 after reporting a 7.1% rise in pre-tax profits to £347 million, a 2.7% increase in total sales to £1.9 billion and, impressively, 8.2% growth in Next Directory sales, arguably the key area of growth for the company in the coming years. Next did warn, however, that it would likely be hiking prices to cope with the introduction of the national living wage, even if it did reassure investors that it shouldn’t have any real material impact on trading.
Heading into October and the general recovery in trading of the past few weeks has been a massive boon for Next, seeing it rise to a current trading price of £79.50 (IT-Finance.com, 27/10/2015). In terms of Wednesday’s third quarter update, of most interest to investors will be Next’s full year guidance going forwards, alongside any comment on its expectations for the all-important Christmas period.
Next PLC has a consensus rating of ‘Hold’ with an average target price of £73.61.
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