Deutsche Bank lifts Next price target after results

(Sharecast News) - Deutsche Bank lifted its price target on Next on Friday to 16,000p from 14,000p after the retailer upped its profit guidance again earlier in the week. Analysts Adam Cochrane said: "The Next machine continues to deliver stronger sales growth than expected which flows down to robust earnings growth.

"In our view, its valuation premium to the rest of the UK retail sector is warranted. 1H full-price sales growth was 7.7%, with an acceleration in 2Q to 9.2%. The beat compared to the guidance has largely become an expectation but this should not distract from the strength of the absolute number compared to peers."

Cochrane said the Next business model continues to evolve, with the upgrade largely coming from the international business and better profit expectations from the equity investments.

"Both of these offer increased diversification away from the more-mature UK business and support the premium P/E multiple," said Cochrane, who maintained his 'hold' rating on the shares.

At 1010 BST, the shares were down 0.1% at 15,695p.