Deutsche Bank lifts Next target to 16,000p but sticks with 'hold'
Published: 09:33 07 Aug 2026 EDT
Deutsche Bank has raised its target price on Next PLC (LSE:NXT) to 16,000p from 14,000p following the clothing retailer's second-quarter trading update, while keeping a hold recommendation on the stock.
Analyst Adam Cochrane said the shares, which closed at 15,715p on Thursday, now offer only around 2% upside. He described Next as a great business delivering consistent upgrades, but one that is fairly priced.
First-half full-price sales rose 7.7%, with growth accelerating to 9.2% in the second quarter. Cochrane said beating guidance has become an expectation at Next, though that should not distract from the strength of the absolute figures compared with peers.
Deutsche has lifted its pre-tax profit forecast for the year to January 2027 by 5% to £1.26 billion.
That sits above the company's own guidance of £1.24 billion, with the difference driven by faster international growth. The bank now expects online international sales to rise 25% this year, up from a previous forecast of 15%.
Profit from that division is forecast to jump 16% above its earlier estimate to £253 million. Cochrane also raised his expectations for income from Next's equity investments in other retail businesses.
Both changes offer greater diversification away from the more mature UK operation and support the premium rating the shares command against the rest of the sector, he argued.
The analyst was more cautious on the equity stakes, saying he would expect a higher return to compensate for the risk, particularly if the investments grow.
He also flagged potential upside from what he regards as a conservative second-half sales forecast. Deutsche assumes brand sales growth of around 7.5% in the second half, matching the first half, despite guidance of 5%.
Next shares have gained 27.8% over the past 12 months, against 18.2% for the FTSE All-Share index. The stock trades on 19 times forecast calendar 2026 earnings, falling to 17.5 times for 2027.
In afternoon trading, the shares were changing hands for 15,660p, little changed on the day.
