The investment prospects of Next plc (LON:NXT) (NXT.L), Centrica PLC (LON:CNA) (CNA.L), ITV plc (LON:ITV) (ITV.L) and Marks and Spencer Group Plc (LON:MKS) (MKS.L) may appear to be relatively uncertain at the moment.
Next, for instance, could be hurt by weakening consumer confidence as the Brexit process moves ahead. Even though inflation is below wage growth, consumers seem to be adopting an increasingly cautious attitude towards spending.
Next, though, has a good track record of performing well relative to sector peers under challenging trading conditions. It appears to have a high degree of customer loyalty, and could adapt to changing consumer tastes and trading conditions.
Centrica is seeking to make major changes to its business model which could create a more efficient entity. This could improve its financial performance in my view, although it faces political and regulatory risk which may weaken demand for its shares.
Since Centrica has a dividend yield of around 8%, it appears to have a margin of safety. While it may deliver improving share price performance in the long run, it could remain volatile in the near term.
ITV’s prospects appear to be relatively downbeat at the moment. It is due to post a modest fall in EPS in the current year and next year, with slowing demand for TV advertising being a key reason in my view.
In future, the uncertain outlook for the UK economy could weigh on its performance. However, with the prospect of a revised strategy in future months and a P/E ratio which is barely in the double digits, I’m cautiously optimistic about the long-term outlook for the ITV share price.
Marks and Spencer is investing heavily in the fundamentals of its business as it seeks to improve its omnichannel capabilities. I feel that it has been somewhat left behind in this area, with rivals having slicker supply chains which allow customers to shop in store, online or through collections in store.
The FTSE 100 company faces an uncertain UK economic outlook, and changes being made to its business model at this time could mean that its shares are volatile. However, with what I view as a sound strategy and a 6%+ dividend yield, I believe the Marks and Spencer share price could deliver improving performance in the long run.