Up to 2016 Next Plc had seen over 10 years of consistently rising earnings and a consistently rising share price. The share price peaked in late in 2015 at just around £80 per share. During 2016 reported earnings fell slightly from 2015 and the share price declined to below £40. Reported earnings for the year to January 2017 declined by about 1% from the year to January 2016 and yet the share price has declined by roughly 50%.
Next Plc has a good record of creating earnings from a relatively small equity base. The value analysis shows that the current price looks cheap against earnings, but expensive against the book value. Each investor will have to make up their own mind about what weight to give to the different messages from the two statistics.
The price decline from 2015 to present has given value investors the opportunity to purchase the earnings of Next Plc at an attractive price. To find out if a value investor should consider an investment in Next Plc common stock click here to download the new analysis.
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