Barclays starts coverage of Next at 'overweight'
By Michele Maatouk
Date: Tuesday 20 Oct 2020
(Sharecast News) - Barclays initiated coverage on shares of retailer Next at 'overweight' on Tuesday, with a 7,200p price target.
The bank said Next is transitioning from a UK store-based retailer into a multi-channel, multi-geography platform.
"Indeed, Next has made more progress in this direction than some may appreciate - we expect UK stores to contribute just 31% of sales and 14% of EBIT by calendar 2022.
"With its online business generating mid-teens percentage sales growth and margins, Next offers an interesting mix of growth and cash returns."
Barclays estimates that Next can return around 8.4% of its market cap over the next five years.
"The share price has admittedly risen by more than 80% since April, but for investors with a longer-term horizon we think the shares still offer attractive upside."
At 1040 BST, the shares were up 2.9% at 6,346.00p.
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