The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication.
Next (first-half earnings 14 September)
Next has gone from growth star to potential value play. Repeated profit warnings underscore just how far this darling has fallen. However, cash return is expected to improve, with £275 million of payouts in four special dividends, while the Next Directory has shown resilience in otherwise difficult times. At just 10.9 times forward earnings versus 17.9 for comparable firms, the shares look to have plenty of bad news priced in. First-half results are expected to see earnings of 1.62p per share, down 13% year-on-year, while revenue is forecast to remain relatively flat at £1.9 billion.
Next shares broke the downtrend from the all-time high in early August, pushing back to £45. This crucial area of resistance is still unbroken however, which suggests weakness towards £40 and then £35.