NEXT plc : Strong in the UK but limited prospects for growth and margins
NEXT can claim the leading position in the UK fashion category. Moreover, the company managed the transition from offline to online comparatively well. However, top-line growth should remain at 4% a year until 2026 as the business outside the UK is too small. The operating margin should decrease 40bp to 17.6% on higher wages and general Opex inflation. We initiate coverage with a Neutral rating and a TP of 8,900p (based on a peer group and DCF). - >Leading fashion retail...Next Group is a retailer engaged in providing clothing, footwear, accessories and home products. Co. is primarily comprised of the following segments: NEXT Retail, which sells clothing, footwear, accessories and/or home products; NEXT Directory, an online and catalogue shopping business; NEXT International Retail, with around 200 mainly franchised stores across the world at Jan 28 2017; NEXT Sourcing, which designs and sources NEXT branded products; and Lipsy, which designs and sells Lipsy and other branded fashion products. As of Jan 28 2017, Co.'s NEXT Retail segment had a chain of around 540 stores in the U.K. and Eire.
Oddo Securities provides securities brokerage and research services. The company offers equity, economic, and derivatives research and credit analysis services. It focuses on insurance, automotive, building materials, pharmaceuticals, telecommunications, information technology, and agri-food industries.
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