Panmure Gordon retained its "buy" stance on Next (NXT) with an increased target price of 2,648p, from 3,400p. The broker expects the fashion retailer's Home division to have benefited from the wet weather and Panmure forecasts second quarter revenue growth of 11.5% from the firm's Directory division. The broker noted that the shares have risen some 10.5% since the first quarter results release at the start of May and believes they will continue to be supported by the company's share buyback scheme
UBS has raised its target price for High Street fashion and homeware retailer Next from 3,250p to 3,500p and reiterated its 'buy' rating on the stock ahead of its second-quarter results.
"We believe Next may have escaped the worst impact of the weather in Q2. Budgets and stock levels are traditionally kept tight, Directory may have benefitted from the weather and (although unquantifiable) stock shortages at the market leader may also have helped," UBS said in a research note on Thursday.
Last week's update from retailer Next was solid, with a fall in sales at its high street stores offset by sales at its home shopping business. Store sales fell 3.9pc in the 13 weeks to April 28, hurt by the recent bad weather. This was slightly worse than consensus expectations. Next Directory sales were slightly better than the City had pencilled in, rising 11.4pc. So, overall, sales rose 1.4pc. It is also noteworthy that Next was up against tough comparative numbers, with last year's first-quarter sales jumping 5.2pc following a warm Easter and the build-up to the Royal Wedding. The company will need to continue to deliver to maintain this rating – whatever shocks happen to the wider economy. The retail sector has already derated over the past month. There is no doubt that Next is a well-run, quality business. But Questor feels the shares are up with events and profit should be taken as they present themselves. Questor says sell.
Fashion chain Next is sticking with full year guidance given in March after first quarter sales showed a small year-on-year improvement, helped by contributions from new stores. Sales, excluding value added tax (VAT), for the bricks and mortar retail estate fell 3.9% in the 13 weeks to April 28th from a year earlier, but the Directory division - catalogue and Internet sales - rode to the rescue with sales growth of 11.8%. Total sales over the period were up 1.4%, of which net sales from new space accounted for 2.9% of total sales growth.
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