Fact based stock research
Next (LSE:NXT)

GB0032089863

How to read the free ranks

For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

Next stock research in summary

nextplc.co.uk

ANALYSIS: With an Obermatt Combined Rank of 16 (worse than 84% compared with investment alternatives), Next (Department Stores, United Kingdom) shares have lower financial characteristics compared with similar stocks. Shares of Next are low in value (priced high) with a consolidated Value Rank of 16 (worse than 84% of alternatives) and show below-average growth (Growth Rank of 37) but are safely financed (Safety Rank of 65), which means low debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 16, is a sell recommendation based on Next's financial characteristics. As the company Next's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 16) and low growth (Obermatt Growth Rank of 37), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. In this case, good financing practices (Obermatt Safety Rank of 65) are a positive sign, because it may allow the company to weather challenging times until the hoped-for cash flows materialize. This may be true for high-tech or biotechnology companies with enough cash to sustain prolonged business development. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and unattractive today. In such cases, the Obermatt Method has limited value, as it is based on facts we can observe today. If the facts lie all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that account for a small fraction of a safe portfolio. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	16
Growth Rank	37
Safety Rank	65
Combined Rank	16

Country	United Kingdom
Industry	Department Stores
Index	FTSE All Shares, FTSE 100, FTSE 350, Diversity Europe, Human Rights
Size class	X-Large

This stock has achievements: Gold Winner CEO.

14-Nov-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

Multiple opinions. One number.

Analysts rarely agree on a stock’s future. So, who do you believe? Obermatt translates those collective views into a single Sentiment Rank. That plus the financial ranks give you the ultimate 360° View. Sign up to access them.

Why popular stocks have low ratings

It’s easier said than done. When your stock drops, it’s easy to want to sell it and find a better performer. Think twice, or even three times, before trading. Those fees (especially the hidden ones) can eat up your gains.

Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Next

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	7	25	20	16
GROWTH
GROWTH	73	47	61	37
SAFETY
SAFETY	65	49	69	65
SENTIMENT
SENTIMENT	n/a	74	78	^new
360° VIEW
360° VIEW	n/a	43	74	^new

Most recent update of the stock research: 14-Nov-2024. Financial reporting date used for calculating ranks: 27-Jul-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Next is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	7	25	20	16
GROWTH
GROWTH	73	47	61	37
SAFETY
SAFETY	65	49	69	65
COMBINED
COMBINED	38	22	46	16

Last update of combined financial performance: 14-Nov-2024. Stock analysis on combined financial performance: The higher the rank of Next the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 16 (worse than 84% compared with alternatives), Next shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for Next. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 58% of comparable companies, making the stock an attractive buy for dividend investors. However, dividend investors may get disappointed because all other critical financial indicators are below the market median: Price-to-Sales is 15 which means that the stock price compared with what market professionals expect for future profits is higher than 85% of comparable companies, indicating a low value concerning Next's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 29 which means that the stock price compared with what market professionals expect for future profit levels is higher than 71% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 12 is also low. Compared with invested capital, the stock price is higher than for 88% of comparable investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 16, is a sell recommendation based on Next's stock price compared with the company's operational size and dividend yields. Should dividend investors pick Next? The company-reported financials speak against it. The company is expensive compared with revenue and invested capital levels, two reliable company size indicators. In addition, it currently has a low level of profits. How can future dividends be paid in the case that profits remain low? Dividend investors should choose Next only if they reasonably expect the low current profit levels to be transitory. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is essential in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	21	15	9	15
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	67	44	39	29
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	2	14	11	12
DIVIDEND YIELD
DIVIDEND YIELD	1	60	63	58
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	7	25	20	16

Last update of Value Rank: 14-Nov-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Next; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 37 (better than 37% compared with alternatives), Next shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with three out of four indicators below average for Next. Sales Growth has a below market rank of 38, which means that, currently, professionals expect the company to grow less than 62% of its competitors. The same is valid for Capital Growth, with a rank of 20, and Profit Growth, with a rank of 27. Currently, professionals expect the company to grow its profits less than 73% of its competitors). Only shareholders are optimistic. Stock Returns are above average at a rank of 80, which means that the stock returns have recently been above 80% of alternative investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 37, is a hold recommendation for growth and momentum investors. That picture may be the result for a company that has reached the bottom. All went south for Next, and it still looks bad, but some investors already see light at the end of the tunnel, rewarding the stock with recent above-market stock returns. It could also mean that investors are correcting an overreaction to negative news. If that were the case, the positive stock returns are not yet a sign of recovery. Investors should look closely at the Value and Sentiment indicators before they make a stock purchasing decision, because growth is unlikely to be the driving argument behind this investment. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is low here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	88	49	61	38
PROFIT GROWTH
PROFIT GROWTH	18	74	39	27
CAPITAL GROWTH
CAPITAL GROWTH	n/a	27	34	20
STOCK RETURNS
STOCK RETURNS	44	43	84	80
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	73	47	61	37

Last update of Growth Rank: 14-Nov-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Next.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 65 (better than 65% compared with alternatives), the company Next has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Next is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above-average for Next. Refinancing is at 50, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 50% of its competitors. Liquidity is also good at 88, meaning the company generates more profit to service its debt than 88% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 36, which means the company has an above-average debt-to-equity ratio. It has more debt than 64% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 65 (better than 65% compared with alternatives), Next has a financing structure that is safer than that of its competitors. This is not bad if things go well. The higher debt level means better returns to shareholders if things go well. Many top-performing companies operate with higher debt levels, and Next could be in that group. But if you expect the environment to turn rougher, the higher leverage could become a problem. The same is valid if you expect interest rates to rise. That could squeeze shareholder returns, which so far have benefitted from better conditions. In the long-term, investors may have a debt challenge with Next and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	44	19	27	36
REFINANCING
REFINANCING	50	71	54	50
LIQUIDITY
LIQUIDITY	65	62	88	88
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	65	49	69	65

Last update of Safety Rank: 14-Nov-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Next and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	43	40	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	99	47	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	34	90	^new
MARKET PULSE
MARKET PULSE	n/a	52	89	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	74	78	^new

Last update of Sentiment Rank: 14-Nov-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Next.
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