Broker snap: Nomura reiterates buy rating for Next

23rd Mar 2012 10:25

Fashion and homeware retailer Next was performing well on Friday morning, with Nomura providing a lift saying that the stock is a key holding in the retail sector.Next reported full-year basic earnings per share of 253.9p for the year ended January 31st, slightly above Nomura's 248.1p estimate."52-week sales performances (retail -1.4%, directory +16.4%) indicated a stronger post-Christmas trading period, although this included the benefit of trading on Boxing Day. Results detail indicates retail gross margins +70bp, owing to improved clearance rates post Christmas, offset by operating deleverage on occupancy and central/warehousing costs," the broker said."We continue to view the shares as a core holding in the sector, with capital discipline, productivity gains and m/term brand development key in our view." A buy rating was reiterated.The target price has been raised slightly, from 3,000p to 3,050p. Nomura said that the stock is trading at 10.3 times prospective earnings.Shares were trading 2.81% higher at 2,966p by 10:25.BC