Financial Trading Blog
Stock of the day 18/03/2016 – Next PLC
Things were looking so good for Next in 2015; after falling away from its all-time, £81.50-crossing high in August the company had begun to recover by the start of December, touching the £81 mark once again. Yet trading turned ugly as December continued, Next plunging all the way to £71.27 before closing out the year at £72.80.
Kicking off 2016 in inauspicious style, Next then revealed a disappointing set of Christmas figures, blaming unseasonably warm weather for the 0.5% drop in high street sales (though Next Directory sales did see a promising 2% increase). The real kicker was that this slump saw Next lower its full year forecasts, the company now expecting pre-tax profits of £817 million; still a 4.5% increase year-on-year, but down from the 12.5% surge seen between 2013 and 2014, and at the lower end of the previous £810 million to £845 million outlook.
(Source: IT-Finance.com 18/03/2016)
This news immediately sent Next lower, and by the middle of January the stock was trading below £65 for the first time in over a year. Rising back to £70 by the end of the month Next then fell back as the market-wide sell-off of February intensified, hitting a low of £64.28. Next’s next recovery, to £71, toward the end of February was just as short-lived as its previous rebound, a gradual decline leaving the stock at a current trading price of £66.15 (IT-Finance.com, 18/03/2016).
Expectations will be low for Next’s full year report; yet if the company can manage to reveal an improvement on its previously announced pre-tax forecast the its stock might be able to crawl back to the £70 mark it has struggled to break beyond in recent weeks.
Next PLC has a consensus rating of ‘Hold’ with an average target price of £71.37.
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