LSE:NXT

Stock Analysis Report

Executive Summary

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


Snowflake Analysis

Good value average dividend payer.


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

2.1%

NXT

1.5%

GB Multiline Retail

-0.4%

GB Market


1 Year Return

42.9%

NXT

8.4%

GB Multiline Retail

6.6%

GB Market

Return vs Industry: NXT exceeded the UK Multiline Retail industry which returned 9.3% over the past year.

Return vs Market: NXT exceeded the UK Market which returned 6.2% over the past year.


Shareholder returns

NXTIndustryMarket
7 Day2.1%1.5%-0.4%
30 Day1.9%1.7%-1.7%
90 Day4.9%5.0%5.4%
1 Year47.1%42.9%14.2%8.4%12.4%6.6%
3 Year114.4%86.7%32.0%13.6%18.5%3.4%
5 Year20.2%-4.0%-7.9%-27.6%35.8%4.7%

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?

38.4%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: NXT (£71.42) is trading below our estimate of fair value (£115.65)

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 (15.8x) compared to the Multiline Retail industry average (23.1x).

PE vs Market: NXT is good value based on its PE Ratio (15.8x) compared to the UK market (18.5x).


Price to Earnings Growth Ratio

PEG Ratio: NXT's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: NXT is overvalued based on its PB Ratio (42.7x) compared to the XE Multiline Retail industry average (2.9x).


Next Steps

Future Growth

How is NEXT forecast to perform in the next 1 to 3 years based on estimates from 16 analysts?

-1.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: NXT's earnings are forecast to decline over the next 3 years (-1.2% per year).

Earnings vs Market: NXT's earnings are forecast to decline over the next 3 years (-1.2% per year).

High Growth Earnings: NXT's earnings are forecast to decline over the next 3 years.

Revenue vs Market: NXT's revenue (2.8% per year) is forecast to grow slower than the UK market (3.5% per year).

High Growth Revenue: NXT's revenue (2.8% 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 (88.4%).


Next Steps

Past Performance

How has NEXT performed over the past 5 years?

-1.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: NXT has high quality earnings.

Growing Profit Margin: NXT's current net profit margins (14.2%) are lower than last year (14.4%).


Past Earnings Growth Analysis

Earnings Trend: NXT's earnings have declined by -1.7% per year over the past 5 years.

Accelerating Growth: NXT's earnings growth over the past year (0.5%) exceeds its 5-year average (-1.7% per year).

Earnings vs Industry: NXT earnings growth over the past year (0.5%) underperformed the Multiline Retail industry 4.7%.


Return on Equity

High ROE: Whilst NXT's Return on Equity (274.47%) is outstanding, this metric is skewed due to their high level of debt.


Return on Assets


Return on Capital Employed


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 (£1.3B).

Long Term Liabilities: NXT's short term assets (£2.0B) do not cover its long term liabilities (£2.3B).


Debt to Equity History and Analysis

Debt Level: NXT's debt to equity ratio (641.6%) is considered high.

Reducing Debt: NXT's debt to equity ratio has increased from 637.9% to 641.6% over the past 5 years.

Debt Coverage: NXT's debt is well covered by operating cash flow (51%).

Interest Coverage: NXT's interest payments on its debt are well covered by EBIT (20x coverage).


Balance Sheet

Inventory Level: NXT has a high level of physical assets or inventory.

Debt Coverage by Assets: NXT's debt is covered by short term assets (assets are 1.4x debt).


Next Steps

Dividend

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

2.32%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: NXT's dividend (2.31%) is higher than the bottom 25% of dividend payers in the UK market (1.82%).

High Dividend: NXT's dividend (2.31%) is low compared to the top 25% of dividend payers in the UK market (5.15%).


Stability and Growth of Payments

Stable Dividend: NXT's dividend payments have been volatile in the past 10 years.

Growing Dividend: NXT's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (37%), NXT's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: NXT's dividends in 3 years are forecast to be well covered by earnings (37.5% payout ratio).


Next Steps

Management

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

7.5yrs

Average management tenure


CEO

Simon Wolfson (51yo)

19.1yrs

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 ($USD1.72M) is below average for companies of similar size in the UK market ($USD4.71M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Simon Wolfson
CEO & Executive Director19.1yrsUK£1.33m1.08% £98.4m
Amanda James
Group Finance Director & Executive Director4.8yrsUK£698.00k0.017% £1.6m
Richard S Papp
Group Merchandise & Operations Director and Executive Director1.8yrsUK£743.40k0.016% £1.5m
Jane Shields
Group Sales & Marketing Director and Executive Director6.6yrsUK£757.00k0.049% £4.5m
Seonna Anderson
Company Secretary0yrsno datano data

7.5yrs

Average Tenure

51yo

Average Age

Experienced Management: NXT's management team is seasoned and experienced (7.5 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Simon Wolfson
CEO & Executive Director19.1yrsUK£1.33m1.08% £98.4m
Amanda James
Group Finance Director & Executive Director4.8yrsUK£698.00k0.017% £1.6m
Richard S Papp
Group Merchandise & Operations Director and Executive Director1.8yrsUK£743.40k0.016% £1.5m
Jane Shields
Group Sales & Marketing Director and Executive Director6.6yrsUK£757.00k0.049% £4.5m
Michael Roney
Non-Executive Chairman2.5yrsUK£332.00k0.030% £2.7m
Francis Salway
Senior Independent Non-Executive Director4.8yrsUK£69.00k0.0071% £644.1k
Dianne Thompson
Independent Non-Executive Director5.1yrsUK£57.00kno data
Jonathan Bewes
Independent Non-Executive Director3.3yrsUK£68.00k0.0014% £124.5k
Tristia Harrison
Independent Non-Executive Director1.4yrsUK£20.00k0.00078% £70.9k

4.8yrs

Average Tenure

58yo

Average Age

Experienced Board: NXT's board of directors are considered experienced (4.8 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£9.085b
  • Shares outstanding: 127.49m
  • 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, accessories, and/or home products in the United Kingdom, rest of Europe, the Middle East, Asia, and internationally. The company operates in seven segments: NEXT Retail, NEXT Online, NEXT Finance, NEXT International Retail, NEXT Sourcing, Lipsy, and Property Management. It operates a chain of approximately 510 stores under the name NEXT Retail in the United Kingdom and Eire; and NEXT Online, a platform with approximately 5 million active customers, as well as Websites serving approximately 70 countries. The company also offers consumer credit for NEXT customers to purchase products online and in its stores; operates approximately 200 franchised stores under the NEXT International Retail name in 35 countries; designs and sells own branded and other branded products; and designs and sources NEXT branded products. In addition, it provides property management services, including holding and lease of properties. The company was formerly known as J Hepworth & Son and changed its name to NEXT plc in 1986. NEXT plc was founded in 1864 and is headquartered in Enderby, the United Kingdom. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/20 20:42
End of Day Share Price2020/02/20 00:00
Earnings2019/07/27
Annual Earnings2019/01/26


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.