LSE:NXT

Stock Analysis Report

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Executive Summary

NEXT plc engages in the retail of clothing, footwear, and home products in the United Kingdom, rest of Europe, the Middle East, Asia, and internationally. More Details


Snowflake Analysis

Reasonable growth potential and fair value.


Similar Companies

Share Price & News

How has NEXT's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: NXT has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-0.7%

NXT

-0.4%

GB Multiline Retail

-1.9%

GB Market


1 Year Return

-9.1%

NXT

-5.9%

GB Multiline Retail

-14.5%

GB Market

Return vs Industry: NXT underperformed the UK Multiline Retail industry which returned -7.3% over the past year.

Return vs Market: NXT exceeded the UK Market which returned -14.2% over the past year.


Shareholder returns

NXTIndustryMarket
7 Day-0.7%-0.4%-1.9%
30 Day-1.4%0.9%-1.7%
90 Day22.6%15.3%-4.4%
1 Year-8.3%-9.1%-3.3%-5.9%-11.3%-14.5%
3 Year36.9%26.4%-1.0%-12.6%-9.0%-20.3%
5 Year-6.6%-22.5%-24.4%-39.1%15.3%-10.6%

Price Volatility Vs. Market

How volatile is NEXT's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is NEXT undervalued compared to its fair value and its price relative to the market?

36.9%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: NXT (£61.66) is trading below our estimate of fair value (£97.77)

Significantly Below Fair Value: NXT is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: NXT is good value based on its PE Ratio (23.8x) compared to the XE Multiline Retail industry average (26.1x).

PE vs Market: NXT is poor value based on its PE Ratio (23.8x) compared to the UK market (18.1x).


Price to Earnings Growth Ratio

PEG Ratio: NXT is poor value based on its PEG Ratio (1.1x)


Price to Book Ratio

PB vs Industry: NXT is overvalued based on its PB Ratio (20.1x) compared to the XE Multiline Retail industry average (3.4x).


Next Steps

Future Growth

How is NEXT forecast to perform in the next 1 to 3 years based on estimates from 17 analysts?

22.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: NXT's forecast earnings growth (22.5% per year) is above the savings rate (1.2%).

Earnings vs Market: NXT's earnings (22.5% per year) are forecast to grow slower than the UK market (24.2% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: NXT's revenue (8.4% per year) is forecast to grow faster than the UK market (6% per year).

High Growth Revenue: NXT's revenue (8.4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: NXT's Return on Equity is forecast to be very high in 3 years time (59.8%).


Next Steps

Past Performance

How has NEXT performed over the past 5 years?

-5.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: NXT has high quality earnings.

Growing Profit Margin: NXT's current net profit margins (9.4%) are lower than last year (14.4%).


Past Earnings Growth Analysis

Earnings Trend: NXT's earnings have declined by 5.7% per year over the past 5 years.

Accelerating Growth: NXT's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: NXT had negative earnings growth (-45.5%) over the past year, making it difficult to compare to the Multiline Retail industry average (-29.2%).


Return on Equity

High ROE: Whilst NXT's Return on Equity (84.06%) is outstanding, this metric is skewed due to their high level of debt.


Next Steps

Financial Health

How is NEXT's financial position?


Financial Position Analysis

Short Term Liabilities: NXT's short term assets (£2.0B) exceed its short term liabilities (£807.0M).

Long Term Liabilities: NXT's short term assets (£2.0B) do not cover its long term liabilities (£2.4B).


Debt to Equity History and Analysis

Debt Level: NXT's debt to equity ratio (307.7%) is considered high.

Reducing Debt: NXT's debt to equity ratio has increased from 173.2% to 307.7% over the past 5 years.

Debt Coverage: NXT's debt is well covered by operating cash flow (75.5%).

Interest Coverage: NXT's interest payments on its debt are well covered by EBIT (5x coverage).


Balance Sheet


Next Steps

Dividend

What is NEXT current dividend yield, its reliability and sustainability?

2.16%

Forecast Dividend Yield


Dividend Yield vs Market

Notable Dividend: Unable to evaluate NXT's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate NXT's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if NXT's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if NXT's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: NXT is not paying a notable dividend for the UK market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of NXT's dividend in 3 years as they are not forecast to pay a notable one for the UK market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

8.1yrs

Average management tenure


CEO

Simon Wolfson (52 yo)

19.75yrs

Tenure

UK£1,327,000

Compensation

Lord Simon A. Wolfson has been the Chief Executive Officer of Next Plc since 2001. Lord Wolfson joined Next Plc in 1991, served as its Retail Sales Director since 1993 and became responsible for NEXT Direc ...


CEO Compensation Analysis

Compensation vs Market: Simon's total compensation ($USD0.00) is below average for companies of similar size in the UK market ($USD4.89M).

Compensation vs Earnings: Simon's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Simon Wolfson
CEO & Executive Director19.75yrsUK£1.33m1.1%
£ 86.3m
Amanda James
Group Finance Director & Executive Director5.5yrsUK£698.00k0.025%
£ 2.0m
Richard S Papp
Group Merchandise & Operations Director and Executive Director2.42yrsUK£743.40k0.024%
£ 1.9m
Jane Shields
Group Sales & Marketing Director and Executive Director7.25yrsUK£757.00k0.057%
£ 4.5m
Seonna Anderson
Company Secretaryno datano datano data

8.1yrs

Average Tenure

52yo

Average Age

Experienced Management: NXT's management team is seasoned and experienced (8.1 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Simon Wolfson
CEO & Executive Director19.75yrsUK£1.33m1.1%
£ 86.3m
Amanda James
Group Finance Director & Executive Director5.5yrsUK£698.00k0.025%
£ 2.0m
Richard S Papp
Group Merchandise & Operations Director and Executive Director2.42yrsUK£743.40k0.024%
£ 1.9m
Jane Shields
Group Sales & Marketing Director and Executive Director7.25yrsUK£757.00k0.057%
£ 4.5m
Thomas Hall
Independent Non-Executive Director0.25yrno datano data
Michael Roney
Independent Non-Executive Chairman3.17yrsUK£332.00k0.032%
£ 2.5m
Francis Salway
Senior Independent Non-Executive Director5.42yrsUK£69.00k0.0071%
£ 557.5k
Dianne Thompson
Independent Non-Executive Director5.75yrsUK£57.00kno data
Jonathan Bewes
Independent Non-Executive Director4yrsUK£68.00k0.0014%
£ 107.7k
Tristia Harrison
Independent Non-Executive Director2.08yrsUK£20.00k0.00078%
£ 61.3k

4.7yrs

Average Tenure

56yo

Average Age

Experienced Board: NXT's board of directors are considered experienced (4.7 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

NEXT plc's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: NEXT plc
  • Ticker: NXT
  • Exchange: LSE
  • Founded: 1864
  • Industry: Department Stores
  • Sector: Retail
  • Market Cap: UK£7.863b
  • Shares outstanding: 127.52m
  • Website: https://www.nextplc.co.uk

Number of Employees


Location

  • NEXT plc
  • Desford Road
  • Enderby
  • Leicestershire
  • LE19 4AT
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
NXGP.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJan 1992
NXTLSE (London Stock Exchange)YesOrdinary SharesGBGBPJan 1992
NXGDB (Deutsche Boerse AG)YesOrdinary SharesDEEURJan 1992
NXTLBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPJan 1992
NXGP.YOTCPK (Pink Sheets LLC)UNSPONSORD ADRUSUSDOct 2008

Biography

NEXT plc engages in the retail of clothing, footwear, and home products in the United Kingdom, rest of Europe, the Middle East, Asia, and internationally. The company operates through seven segments: NEXT ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/10/19 21:23
End of Day Share Price2020/10/19 00:00
Earnings2020/07/25
Annual Earnings2020/01/25


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.