Broker tips: Next, M&S, Jupiter Fund Management

25th Aug 2026 13:37

(Sharecast News) - Citi upgraded Next on Tuesday to 'buy' from 'neutral' and lifted the price target to 18,400p from 15,500p as it took a look at the European retail sector.

The bank said Next's international segment has grown at a +20% five-year sales compound annual growth rate and is now more than 20% of product revenues. "It continues to see opportunity for profitable growth via investment in marketing and is future proofing its fulfilment capacity to support ambitious growth," Citi said.

"We model a +17% 4year sales CAGR FY25a-FY29e for international and anticipate a further circa 10 percentage point mix shift over the next four years.

"With reducing exposure to the UK and superior growth, we believe Next now commands a higher multiple versus its own long-term average (circa 14x) as investors start to compare Next with a more global fashion retail peer set."

It added that Next's expected forward total shareholder return is now closing the gap to best-in-class global peer Inditex, which has historically traded at a circa 23x forward P/E.

Citi also upped its price target on Marks & Spencer, to 470p from 390p, reiterating its 'buy' rating as it sees structural tailwinds in both Food and Fashion.

"Incrementally, we assess the margin opportunity in Fashion (versus Next) and believe the Lichfield warehouse will unlock margin benefits from FY29e onwards," it said. "The strength of M&S' Food business is apparent, with Worldpanel data suggesting it is likely to post +DD% sales growth in 1H26e (Citi: +13.1%)."

Berenberg initiated coverage of Jupiter Fund Management with a 'buy' rating and 187p price target, saying it expects the company to outperform when a sustained improvement in investor sentiment transpires.

The bank said the "highly accretive, complementary" acquisition of CCLA Investment Management (CCLA) earlier this year added scale and further diversified the company, while flows have turned positive, in contrast to many of Jupiter's peers.

It noted that between 2021 and 2024, Jupiter suffered material net outflows that were only partially offset by positive market movements. Over the last 12 months, however, there has been a clear shift in momentum, with the business reporting net inflows.

"While it remains difficult to predict flows with any kind of certainty, with investor sentiment constantly shifting on geopolitical news, we believe that Jupiter has a diverse, attractive range of funds that should deliver growth," Berenberg said.

The bank also highlighted Jupiter's balance sheet strength and optionality.

"With cash at the end of the first half of £345m (and seed capital of £80m), Jupiter has one of the strongest balance sheets of the listed UK asset managers," it said. "These items account for over 50% of the company's current market cap."

It pointed out that even after the CCLA acquisition, Jupiter still has £173m of surplus capital.

"Looking ahead, our cash-flow estimates suggest that Jupiter will generate £252m of free cash flow over the next three years (based on 'normal' performance fee expectations). This accounts for a further 30% of the market cap."

Berenberg added that while there are cheaper asset managers, few offer the combination of positive flows and a diverse product set.