Berenberg raises target price on Next

(Sharecast News) - Analysts at Berenberg raised their target price on retailer Next from 14,700p to 17,800p on Thursday, stating the group's fourth-quarter guidance "continues to look cautious" Berenberg, which reiterated its 'buy' rating on Next, thinks that growth angles that have emerged at the company over the past five years could underpin upside risk for the stock.

"In addition to a continuing keen focus on the Next brand - in terms of the quality and style offered to customers - these growth angles include the development of fully-owned brands such as Made, Cath Kidston and Seraphine; licences with other brands to create exclusive ranges, eg Swoon and AllSaints; majority holdings in a long list of branded retailers and joint ventures (JVs), including Reiss, Joules, FatFace and Gap UK and Eire; and the provision of Next Total Platform software and logistics services, which are enabling its majorityowned brands to grow online," said Berenberg.

The German bank increased its current-year adjusted pre-tax profits estimate by 3% from £1.10bn to £1.13bn, while its outer-year estimates increased on its now-higher current-year base.

"We increase our DCF-based price target by 21% from £147 to £178, helped by higher profit estimates and a decrease in the WACC assumption from 8% to 7.2%," added Berenberg.



Reporting by Iain Gilbert at Sharecast.com