Marks & Spencer Group (LON:MKS) has a lot further to go in its turnaround plan, analysts at Hargreaves Lansdown have warned. The comments came after the company updated investors on its half-year performance yesterday, cautioning that t was facing headwinds at its Food business.
Marks & Spencer’s share price was volatile in yesterday’s session, eventually closing 1.62 percent higher at 333.10p following an initial slump. The group’s shares, however, remain more than three percent down over the past year, and nearly five percent in the year-to-date.
‘Not a pretty set of results’
Citywire quoted Hargreaves Lansdown analyst Laith Khalaf as commenting yesterday that M&S’ was ‘not a pretty set of results,’ with the retailer having seen its “turnaround plan undermined by changing consumer shopping habits and a weaker pound”. The analyst explained that while the food business had been keeping the company afloat in recent years, progress now seemed to be ‘flagging,’ and the clothing division needed ‘to start pulling its own weight’.
“There won’t be any champagne accompanying the marmalade sandwiches at M&S HQ, it’s a quick brew then back to work,” Khalaf concluded.
The comments came as the FTSE 100 retailer’s chief executive Steve Rowe commented yesterday that the company still had ‘structural issues to tackle’. Rowe has been trying to turn around M&S fortunes by closing down stores and looking to boost the group’s underperforming clothing division.
Other analysts on M&S
Peel Hunt meanwhile reiterated its ‘buy’ rating on M&S yesterday, valuing the shares at 450p, while Canaccord Genuity reaffirmed the blue-chip retailer as a ‘hold,’ with a price target of 375p. According to MarketBeat, the FTSE 100 company currently has a consensus ‘hold’ rating and an average price target of 354.43p.