Yahoo Finance What Is NEXT plc’s (LON:NXT) Share Price Doing?
Today we’re going to take a look at the well-established NEXT plc (LON:NXT). The company’s stock received a lot of attention from a substantial price increase on the LSE over the last few months. With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, could the stock still be trading at a relatively cheap price? Let’s examine NEXT’s valuation and outlook in more detail to determine if there’s still a bargain opportunity. Check out our latest analysis for NEXT
Is NEXT still cheap?
According to my valuation model, NEXT seems to be fairly priced at around 16.57% above my intrinsic value, which means if you buy NEXT today, you’d be paying a relatively fair price for it. And if you believe that the stock is really worth £52.19, then there isn’t really any room for the share price grow beyond what it’s currently trading. Furthermore, NEXT’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. This may mean it is less likely for the stock to fall lower from natural market volatility, which suggests less opportunities to buy moving forward.
What does the future of NEXT look like?
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. However, with a relatively muted profit growth of 0.027% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for NEXT, at least in the short term.
What this means for you:
Are you a shareholder? NXT’s future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?
Are you a potential investor? If you’ve been keeping tabs on NXT, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on NEXT. You can find everything you need to know about NEXT in the latest infographic research report. If you are no longer interested in NEXT, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
