Next Share Rating Boosted at Citi on Positive Consumer Environment

Next plc (LON: NXT) shares gained more than 2% in Wednesday's session after positive commentary and a re-rating from an analyst at one investment bank.

Citi upgraded the London-listed FTSE 100 retailer to Neutral from Sell, boosting the price target to 9,120p, up from 6,500p.

Analysts at Citi told investors in a research note that they now believe Next is well-placed to benefit from a more positive UK consumer environment.

Citi cited factors such as real wages being positive for three quarters and improving consumer confidence as helping to boost Next's performance and, ultimately, its share price.

After a 2.5% increase on Wednesday, Next shares are currently trading at 8,892p apiece. The stock is up 9% year-to-date and has rallied more than 32% over the last 12 months.

In April, analysts at Jefferies lifted their rating for Next to Buy from Hold, assigning the stock a 10,300p target. Jefferies told investors that Next's UK consumer cash flow model shows a consumer with “substantial disposable income recovery” over the next year.

They noted that the company sees fiscal 2024 and 2025 growth of 7%, with increasing wages and falling energy costs offsetting incremental pressures from housing. Overall, Jefferies also sees an upbeat consumer environment fully translating into a supportive clothing retail market.