Source: Sharecast
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.
Rathbones slumped on Thursday as Jefferies initiated coverage of the shares with an 'underperform' rating and 1,650p price target.
"This is a solid business, but higher growth and operational gearing are available elsewhere in the wealth sector, and we fear traditional discretionary fund managers will be squeezed by advice businesses, platforms and upmarket players," the bank said.
Jefferies said the dividend yield was quite attractive, but noted that it does not expect revenues or operating margins to expand much.
Over at RBC Capital Markets, analysts nudged up their target price on investment firm Aberdeen from 195p to 200p on Thursday as they updated their model for the group's third-quarter trading update.
RBC Capital said its adjusted operating profit forecasts increased by 3% on average over FY25-27, benefitting from higher assets under management and administration, although it noted this was partially offset by its view of yet further weakening of revenue margins in its investment and adviser verticals.
"We also remove Financial Planning from our forecasts from 1 Apr 2026, with the impact of all these updates to our adj operating profit being +1%/+4%/+4% over FY25-27," said the Canadian bank.
RBC Capital, which has a 'sector perform' rating on the stock, stated it was now 2% ahead of consensus on average across the forecast period.
