November 23, 2023
Top 10 Stock Next Strong Buy Recommendation

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For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).

360° View: Obermatt 360° View Next Strong Buy

360 METRICS	November 23, 2023
VALUE
VALUE	18
GROWTH
GROWTH	65
SAFETY
SAFETY	70
SENTIMENT
SENTIMENT	96
360° VIEW
360° VIEW	94

ANALYSIS: With an Obermatt 360° View of 94 (better than 94% compared with alternatives) for 2023, overall professional sentiment and financial characteristics for the stock Next are very positive. The 360° View is based on consolidating four consolidated indicators, with all but one indicator above average for Next. The consolidated Growth Rank has a good rank of 65, which means that the company experiences above-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth, as well as stock returns. This means that growth is higher than for 65% of competitors in the same industry. The consolidated Safety Rank at 70 means that the company has a financing structure that is safer than 70% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. Finally, the consolidated Sentiment Rank has a good rank of 96, which means that professional investors are more optimistic about the stock than for 96% of alternative investment opportunities. But the consolidated Value Rank is less desirable at 18, meaning that the share price of Next is on the higher side compared with indicators such as revenues, profits, and invested capital. This means the stock price is higher than for 82% of alternative stocks in the same industry. ...read more

RECOMMENDATION: With a consolidated 360° View of 94, Next is better positioned than 94% of all alternative stock investment opportunities based on the Obermatt Method. As three out of four consolidated Obermatt Ranks exhibit excellent performance, such as above-average growth (Growth Rank of 65), a safe financing structure (Safety Rank of 70), and positive professional market sentiment (Sentiment Rank of 96), it is a solid stock investment where growth may be the strongest driver of the investment rationale, also reflected by institutional investors. It is typical for growth companies to have low value, as is the case here. Investors are willing to pay more for companies that outperform their competitors. So the question is, how much more do you pay for the stock of Next compared with alternatives? You can use the following rule of thumb: The growth rank measures the growth momentum of the company (65% better than peers). The value rank could be the reverse reflection of that (35%). A Value Rank below that level may be assessed as expensive, a rank above that is still good value. Sometimes market sentiment just reflects the past, sometimes the reality. You pay more than the market average for this stock, but it may be worth it. ...read more

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Sentiment Strategy: Professional Market Sentiment for Next very positive

SENTIMENT METRICS	November 23, 2023
ANALYST OPINION
ANALYST OPINION	41
OPINIONS CHANGE
OPINIONS CHANGE	86
PRO HOLDINGS
PRO HOLDINGS	94
MARKET PULSE
MARKET PULSE	91
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	96

ANALYSIS: With an Obermatt Sentiment Rank of 96 (better than 96% compared with alternatives) for 2023, overall professional sentiment and engagement for the stock Next is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for Next. Analyst Opinions are at a rank of 41 (worse than 59% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. But they are changing their opinions! Analyst Opinions Change has a rank of 86, which indicates a shift in stock research experts opinions for the better. In other words, they are getting more optimistic about stock investments in Next. Even better, the Professional Investors rank is 94, meaning that professional investors hold more stock in this company than in 94% of alternative investment opportunities. Pros tend to favor investing in this company. Furthermore, Market Pulse has a rank of 91, which means that the current professional news and professional social networks are upbeat when discussing this company (more positive news than for 91% of competitors). ...read more

RECOMMENDATION: With a consolidated Sentiment Rank of 96 (more positive than 96% compared with investment alternatives), Next has a reputation among professional investors that is significantly higher than that of its competitors. While analysts are still critical of the company, some are changing their minds. In addition, the professional news channels are optimistic, and many institutional investors have already bought stock in the company. These are encouraging signals, despite the still lower level of analyst recommendations. They may be due to a problematic past, and about to change. The positive sentiment signals are stronger than the negative. ...read more

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Value Strategy: Next Stock Price Value low

VALUE METRICS	November 23, 2023
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	9
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	36
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	8
DIVIDEND YIELD
DIVIDEND YIELD	65
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	18

ANALYSIS: With an Obermatt Value Rank of 18 (worse than 82% compared with alternatives), Next shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for Next. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 65% of comparable companies, making the stock an attractive buy for dividend investors. However, dividend investors may get disappointed because all other critical financial indicators are below the market median: Price-to-Sales is 9 which means that the stock price compared with what market professionals expect for future profits is higher than 91% of comparable companies, indicating a low value concerning Next's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 36 which means that the stock price compared with what market professionals expect for future profit levels is higher than 64% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 8 is also low. Compared with invested capital, the stock price is higher than for 92% of comparable investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 18, is a sell recommendation based on Next's stock price compared with the company's operational size and dividend yields. Should dividend investors pick Next? The company-reported financials speak against it. The company is expensive compared with revenue and invested capital levels, two reliable company size indicators. In addition, it currently has a low level of profits. How can future dividends be paid in the case that profits remain low? Dividend investors should choose Next only if they reasonably expect the low current profit levels to be transitory. ...read more

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Growth Strategy: Next Growth Momentum good

GROWTH METRICS	November 23, 2023
REVENUE GROWTH
REVENUE GROWTH	61
PROFIT GROWTH
PROFIT GROWTH	39
CAPITAL GROWTH
CAPITAL GROWTH	39
STOCK RETURNS
STOCK RETURNS	88
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	65

ANALYSIS: With an Obermatt Growth Rank of 65 (better than 65% compared with alternatives), Next shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Next. Sales Growth has a rank of 61 which means that currently professionals expect the company to grow more than 61% of its competitors. Stock Returns are also above average with a rank of 88. But Capital Growth has only a rank of 39, which means that currently professionals expect the company to grow its invested capital less than 61% of its competitors. Profit Growth is also low, with a rank of only 39, which means that, currently, professionals expect the company to grow its profits below average. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 65, is a buy recommendation for growth and momentum investors. This is a surprising picture, as the messages from the operating growth indicators of revenues, profits, and invested capital are mixed, while stock returns are above average. It may indicate new intellectual properties, such as brand improvement or a strong market position that shows in revenues but not in the capital. The low profit-growth rate may indicate an early phase where costs are still high, and revenues don't fully cover upfront investments or fixed costs. The positive investor outlook with a 88% peer outperformance is reaffirmed in this case which may be a good sign for an investment into a well-protected high-growth company. This fact needs to be confirmed by researching the company website and press. ...read more

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Safety Strategy: Next Debt Financing Safety above-average

SAFETY METRICS	November 23, 2023
LEVERAGE
LEVERAGE	26
REFINANCING
REFINANCING	51
LIQUIDITY
LIQUIDITY	88
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	70

ANALYSIS: With an Obermatt Safety Rank of 70 (better than 70% compared with alternatives), the company Next has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Next is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above-average for Next. Refinancing is at 51, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 51% of its competitors. Liquidity is also good at 88, meaning the company generates more profit to service its debt than 88% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 26, which means the company has an above-average debt-to-equity ratio. It has more debt than 74% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 70 (better than 70% compared with alternatives), Next has a financing structure that is safer than that of its competitors. This is not bad if things go well. The higher debt level means better returns to shareholders if things go well. Many top-performing companies operate with higher debt levels, and Next could be in that group. But if you expect the environment to turn rougher, the higher leverage could become a problem. The same is valid if you expect interest rates to rise. That could squeeze shareholder returns, which so far have benefitted from better conditions. ...read more

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Combined financial peformance: Next Above-Average Financial Performance

COMBINED PERFORMANCE	November 23, 2023
VALUE
VALUE	18
GROWTH
GROWTH	65
SAFETY
SAFETY	88
COMBINED
COMBINED	50

ANALYSIS: With an Obermatt Combined Rank of 50 (better than 50% compared with investment alternatives), Next (Department Stores, United Kingdom) shares have above-average financial characteristics compared with similar stocks. Shares of Next are low in value (priced high) with a consolidated Value Rank of 18 (worse than 82% of alternatives). But they show above-average growth (Growth Rank of 65) and are safely financed (Safety Rank of 70, which means below-average debt burdens). ...read more

RECOMMENDATION: A Combined Rank of 50, is a buy recommendation based on Next's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Next exhibits low value (Obermatt Value Rank of 18), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 65). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 70) are a double-edged sword: if the company continues growing, low debt limits shareholder returns. But if the company increases its debt, it will also increase risk. In other words, this is an investment on the safer side, despite the above-average price (low value). ...read more

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