- Next
- 28 March 2025 13:05:39
Source: Sharecast
Berenberg noted that at Next's FY25 results meeting on 27 March, chief executive David Wolfson had pointed out that the firm had no "moat" – meaning that nothing in the business cannot be copied. However, Berenberg believes that building up a brand and business of Next's scale would take a long time.
Moreover, the German bank said Next's Total Platform – which offers end-to-end online selling services to brands and retailers, from website creation to delivery and returns – continues to be "unmatched" in the UK.
"Next is also fortunate in that it operates in the clothing and home mid-market sweet spot, which is relatively insulated from ultra-low-price competitors such as Shein and where the current trend is for consumers to seek better quality, even if they are buying fewer items," said Berenberg, which reiterated its 'buy' rating on the stock.
"Following the circa 11% rise in the share price in reaction to the increased sales and profit guidance that accompanied the full-year results, Next is trading on circa 16x price-to-earnings in the current year on our numbers, which is within its 20-year historical range of circa 6x to circa 18x."
Reporting by Iain Gilbert at Sharecast.com