NEXT plc (NXT) is a leading apparel retail business based in the UK. NEXT is listed on the London Stock Exchange (LSE) and employs 28,545 staff. All prices are listed in pence sterling.
|52-week range||3311p - 8180p|
|50-day moving average||7247.8823p|
|200-day moving average||6271.8804p|
|Wall St. target price||5337.47p|
|Dividend yield||1.68p (3.65%)|
|Earnings per share (TTM)||256.8p|
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Valuing NEXT stock is incredibly difficult, and any metric has to be viewed as part of a bigger picture of NEXT's overall performance. However, analysts commonly use some key metrics to help gauge the value of a stock.
NEXT's current share price divided by its per-share earnings (EPS) over a 12-month period gives a "trailing price/earnings ratio" of roughly 31x. In other words, NEXT shares trade at around 31x recent earnings.
That's relatively high compared to, say, the trailing 12-month P/E ratio for the FTSE 250 at the end of September 2019 (19.71). The high P/E ratio could mean that investors are optimistic about the outlook for the shares or simply that they're over-valued.
However, NEXT's P/E ratio is best considered in relation to those of others within the apparel retail industry or those of similar companies.
NEXT's EBITDA (earnings before interest, taxes, depreciation and amortisation) is £626 million.
The EBITDA is a measure of a NEXT's overall financial performance and is widely used to measure a its profitability.
To put NEXT's EBITDA into context you can compare it against that of similar companies.
|Revenue TTM||£3.5 billion|
|Operating margin TTM||14.39%|
|Gross profit TTM||£1.7 billion|
|Return on assets TTM||8.64%|
|Return on equity TTM||108.2%|
|Market capitalisation||£10.5 billion|
TTM: trailing 12 months
Environmental, social and governance (known as ESG) criteria are a set of three factors used to measure the sustainability and social impact of companies like NEXT.
When it comes to ESG scores, lower is better, and lower scores are generally associated with lower risk for would-be investors.
Total ESG risk: 10.68
Socially conscious investors use ESG scores to screen how an investment aligns with their worldview, and NEXT's overall score of 10.68 (as at 01/01/2019) is excellent – landing it in it in the 5th percentile of companies rated in the same sector.
ESG scores are increasingly used to estimate the level of risk a company like NEXT is exposed to within the areas of "environmental" (carbon footprint, resource use etc.), "social" (health and safety, human rights etc.), and "governance" (anti-corruption, tax transparency etc.).
To gain some more context, you can compare NEXT's total ESG risk score against those of similar companies.
Environmental score: 1.93/100
Social score: 6.52/100
Governance score: 1.09/100
Controversy score: 3/5
ESG scores also evaluate any incidences of controversy that a company has been involved in. A high-profile company, NEXT scored a 3 out of 5 for controversy – a middle-of-the-table result reflecting that NEXT hasn't always managed to keep its nose clean.
Wondering how that compares? Below are the controversy scores of similar companies.
|Total ESG score||10.68|
|Total ESG percentile||5.26|
|Level of controversy||3|
Dividend payout ratio: 22.42% of net profits
Recently NEXT has paid out, on average, around 22.42% of net profits as dividends. That has enabled analysts to estimate a "forward annual dividend yield" of 3.65% of the current stock value. This means that over a year, based on recent payouts (which are sadly no guarantee of future payouts), NEXT shareholders could enjoy a 3.65% return on their shares, in the form of dividend payments. In NEXT's case, that would currently equate to about 1.68p per share.
While NEXT's payout ratio might seem low, this can signify that NEXT is investing more in its future growth.
The latest dividend was paid out to all shareholders who bought their shares by 5 December 2019 (the "ex-dividend date").
NEXT's dividend payout ratio is perhaps best considered in relation to those of similar companies.
NEXT's shares were split on a 3:1 basis on 24 December 1984. So if you had owned 1 share the day before before the split, the next day you'd have owned 3 shares. This wouldn't directly have changed the overall worth of your NEXT shares – just the quantity. However, indirectly, the new 66.7% lower share price could have impacted the market appetite for NEXT shares which in turn could have impacted NEXT's share price.
Over the last 12 months, NEXT's shares have ranged in value from as little as 3311p up to 8180p. A popular way to gauge a stock's volatility is its "beta".
Beta is a measure of a share's volatility in relation to the market. The market (LSE average) beta is 1, while NEXT's is 1.1287. This would suggest that NEXT's shares are a little bit more volatile than the average for this exchange and represent, relatively-speaking, a slightly higher risk (but potentially also market-beating returns).
To put NEXT's beta into context you can compare it against those of similar companies.
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 Retail, NEXT Online, NEXT Finance, NEXT International Retail, NEXT Sourcing, Lipsy, and Property Management. It operates retail stores; NEXT Online, a online retail platform; and 185 franchise stores in 31 countries. The company also offers consumer credit for NEXT customers; NEXT branded products; and women's fashion products under the Lipsy's own brand and other third-party brands. 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.
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