Source: Sharecast
Berenberg said Next 15's medium-term target of 50% AOP growth from "Track 1" businesses was "ambitious, but achievable" in its view, given the six businesses in Track 1 were all in structural growth markets.
The German bank, which has a 'buy' rating on the stock, stated transparency from new divisional reporting should help the market value Next 15 better, and it still sees potential for a re-rating.
"We decrease our FY27 adjusted operating forecasts by c7% to account for asset disposals and the increased investment in key businesses, partly offset by cost efficiencies. As a result, our price target falls to 510p, which still indicates 45% upside," said Berenberg.
"The shares trade on a FY27E of 7.8x, and an EV/EBITDA of 6.0x, with the Mach49 arbitration, set for March, weighing on the valuation."
Reporting by Iain Gilbert at Sharecast.com