Berenberg raises target price on Next following latest trading update

(Sharecast News) - Analysts at Berenberg lifted their price target on Next from 18,000p to 18,700p on Thursday, as they said the retailer's latest trading update reinforced momentum across its brand portfolio and fast‑growing international operations. Berenberg, which stood by its 'buy' rating on the stock, highlighted Next's strong track record of upgrades and said M&A activity and newly unlocked international online growth potential remained key drivers of further upside. It cautioned that year‑on‑year weather comparisons in September could affect early autumn trading, following two unusually cool Septembers in 2024 and 2025.

The German bank pointed to the growing contribution from Next's portfolio of more than 40 non‑Next brands, many of which now benefit from full access to the group's sourcing, logistics, marketing and credit infrastructure. Wholly owned names such as Made, Russell & Bromley and Bhoem helped drive 13.2% LABEL growth in Q2, while equity‑stake brands including Reiss, Joules and FatFace supported a £10m uplift in full‑year profit guidance from investments.

Berenberg noted another beat and upgrade in the Q2 update, with full‑price sales up 9.2%, ahead of the 5.6% consensus. International sales surged 36.9% in the quarter and 23.9% in H1, helped by a larger‑than‑planned increase in marketing spend, while UK online Next‑brand sales were down 1.2% against a tough prior‑year base. Full‑year profit guidance was raised by around 2%, prompting Berenberg to lift its earnings per share forecast by a similar amount.

It also said Next's share price remained too high for buybacks under its capital‑return framework, which requires pre-tax profits as a percentage of market cap to exceed 8%. For now, Berenberg assumes the planned £524m return will be delivered entirely through buybacks.





Reporting by Iain Gilbert at Sharecast.com