Broker tips: Next, Helios Towers

5th Nov 2026 12:46

(Sharecast News) - Jefferies reiterated its 'hold' rating and 15,800p target price on Next after the retailer's third-quarter update, arguing that robust international growth continued to offset a more subdued performance in the UK.

The broker said UK trading was softer than many investors had anticipated, although performance remained in line with management's previous guidance. Weekly sales figures pointed to a weaker September before trading improved in October as cooler weather boosted demand, with the period ending at a growth rate slightly ahead of the group's fourth-quarter assumptions.

However, Jefferies noted that the wider group performance once again exceeded expectations thanks to strong international growth. The broker said overseas sales benefited from a greater-than-expected increase in marketing investment, with spending rising 67% against guidance for a 42% increase.

Looking ahead, Jefferies said Next's fourth-quarter outlook assumes marketing growth slows back to planned levels, adding that it saw no evidence of any material change in returns on marketing spend.

Jefferies argued that the update again demonstrated Next's ability to navigate near-term pressures in the UK through the strength of its international operations.

"Once again, Next's Q3 shows a business amply able to offset near-term UK pressures with abundant international growth," Jefferies said, noting that the shares already reflect much of that strength, trading on roughly 18x estimated 2027 earnings.

Analysts at Berenberg raised their target price on Helios Towers to 310p from 295p on Thursday, citing another quarter of ahead-of-expectations operational performance, upgraded full-year guidance and stronger-than-expected initial forecasts for 2027.

Berenberg said Helios delivered a fresh beat on tenancy additions in the third quarter, adding 924 tenancies and taking the total to 35,379 - up 12.2% year-on-year and comfortably exceeding consensus forecasts.

The German bank noted that rising mobile penetration, rapid population growth and increasing data consumption across Helios' markets continued to drive demand for telecoms infrastructure. Record year-to-date tenancy additions of 3,435 were also expected to provide a meaningful boost to earnings in 2027 and beyond.

Berenberg highlighted improving profitability and cash generation, with return on invested capital increasing to 14.2% from 13.8% a year earlier, while net leverage stood at 3.4x, remaining within the group's medium-term target range and below levels typically seen at developed-market tower operators.

Helios also raised its 2026 outlook for a third time this year, guiding towards the top end of previously upgraded ranges, including tenancy additions of 4,000 and adjusted underlying earnings of $535m.

Looking ahead, Berenberg said initial FY27 guidance appeared conservative, with tenancy additions of 3,000 ahead of market expectations and management forecasting double-digit EBITDA growth. As a result, the broker lifted its EBITDA forecasts through FY28 and reiterated its 'buy' recommendation, describing Helios as one of its top picks.