Marks & Spencer Group (LON:MKS) will post a drop in sales when it updates investors on its second-quarter performance, analysts at Deutsche Bank have said. The comments come ahead of the blue-chip retailer’s interims on November 8.
Marks & Spencer’s share price lost ground in London on Friday, shedding 1.52 percent to close at 348.70p, underperforming the broader UK market, with the benchmark FTSE 100 index closing in positive territory. The group’s shares have added about 10 percent to their value over the past year, but are down by 0.4 percent in the year-to-date.
Deutsche Bank reiterated its ‘hold’ rating on Marks & Spencer on Friday, with a price target of 345p on the shares. The move came as the analysts forecast that the blue-chip retailer will unveil that its UK like-for-like sales declined 0.7 percent in the second quarter of its financial year, while underlying pre-tax profit is expected to come in 12 percent lower, reflecting a mixed performance in an increasingly challenging UK market.
“One positive trend should be International where closure of loss-making countries and translational movements should drive a material boost,” the analysts pointed out, as quoted by Sharecast.
The analyst update came after it recently emerged that Marks & Spencer had started talks with to sell its wholly-owned Hong Kong and Macau stores, as the group’s chief executive Steve Rowe continues with his restructuring of the high street retailer.
The 25 analysts offering 12-month price targets for Marks & Spencer for the Financial Times have a median target of 340.00p, with a high estimate of 450.00p and a low estimate of 250.00p. As of October 6, the consensus forecast amongst 26 polled investment analysts covering the blue-chip group advises investors to hold their position in the company.