Marks & Spencer share price: Credit Suisse turns bearish on retailer

Analysts point to ‘uninspiring’ trading update

Marks & Spencer share price: Credit Suisse turns bearish on retailer

Credit Suisse has lowered its rating on Marks & Spencer Group (LON:MKS), pointing to the retailer’s ‘uninspiring’ quarterly update, The Times reports. The move comes after the blue-chip group recently revealed a drop in both clothing and food sales for the 13 weeks to December 30.

Marks & Spencer’s share price has slipped into the red in today’s session, having given up 0.34 percent to 306.75p as of 14:29 GMT, marginally outperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.54 percent lower at 7,689.79 points. The group’s shares have lost more than eight percent of their value over the past year, as compared with an over seven-percent rise in the Footsie.

Credit Suisse lowers rating on M&S

Credit Suisse trimmed its rating on Marks & Spencer from ‘neutral’ to ‘underperform’ today, lowering its valuation on the shares from 370p to 285p. The Times quoted the analysts as saying that while there was ‘progress in some areas’ at the blue-chip retailer, its food division and online operation were falling further behind the market.

The analysts further reckon that the shares should “trade at a 15 percent discount to UK retail sector given the structural issues the company faces in both food and clothing, the lack of earnings growth over the next two years, the execution risks given the various ongoing transformation programs and the limited visibility at present on the margin and cost implications of the updated [transformation] plan”.

Other analysts on high street retailer

Deutsche Bank repeated its ‘hold’ stance on M&S last week, valuing the shares at 330p, while JPMorgan Chase & Co remains ‘underweight’ on the stock with a price target of 285p. According to MarketBeat, the blue-chip retailer currently has a consensus ‘hold’ rating and an average price target of 333.94p. 

As of 15:00 GMT, Wednesday, 24 January, Marks and Spencer Group Plc share price is 344.15p.

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