Jefferies stays at 'hold' on Next despite strong international growth

5th Nov 2026 12:33

(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.

Reporting by Iain Gilbert at Sharecast.com