Next H1 preview: Where next for the Next share price?

Next has seen an explosion in sales since it reopened stores in April, prompting it to boost expectations for the remainder of the year. we glance at what to expect from the earnings and consider how Next shares could react.
Next is scheduled to release interim earnings on the morning of Wednesday Michaelmas .

Next has proven to be one among the foremost resilient players in what has been a challenging 18 months for retailers, because of its omnichannel approach that has allowed it to thrive online whilst stores were closed. However, with stores having reopened in April, analysts are anticipating a robust performance from Next within the half .

This is demonstrated by the very fact full price sales within the second quarter were 18.6% above two years earlier, before the pandemic hit – with Next having only expected a light 3% rise. Next said the stronger-than-expected performance was right down to pent-up demand for adult clothing, warmer-than-anticipated weather, increased domestic spending and therefore the fact consumers are flush with money they saved during lockdown.

Analysts expect sales to leap to £2.17 billion within the half from just £1.29 billion the year before, when the pandemic severely hit sales. For more context, that compares to £2.05 billion within the half of 2019, before the pandemic hit.

Basic EPS is forecast to swing to a profit of 219.18p from the 9.0p loss booked the year before.

Investors are going to be keeping an eye fixed on Next’s guidance for the complete year after bumping-up its targets back in July. the corporate said it’s getting to deliver 6% full price sales growth instead of its initial target of three , and £750 million in pretax profit.

They will even be eagerly expecting any commentary on shareholder returns, having said in July that it intended to distribute around £240 million in surplus cash this year. that has the £140 million returned through a 110p special payout that was paid in early September. However, ordinary dividends aren’t set to be reinstated until subsequent fiscal year covering the 12 months to the top of January 2023, but some analysts think share buybacks could come into play within the current fiscal year after Next decided to repay the business rates relief it received, demonstrating its financial strength.

Next shares have fully recovered the heavy losses booked during the pandemic and trade over 16% above before the coronavirus crisis started back in February 2021, which has also seen it surpass the record all-time highs seen back in 2015. The 21 brokers covering Next have a mean Buy rating on the stock but the target price of 8,359.1p implies there’s only around 1.5% potential upside from the present share price

The Next share price has traded range bound round the all-time high for the past six months capped on the upper band by 8360p and on the lower band by 7680p.

After rebounding off the 200 sma earlier this month, Next share price is extending gains towards the upper band at 8360p.

The RSI is supportive of further gains whilst it remains out of overbought territory.

A move above 8360p could expose 8400p and fresh all-time highs.

Meanwhile, support are often seen at 7970p the 50 sma before 7835p the 200 sma. an opportunity below 7680p the lower band of the channel could see the sellers gain traction.

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