Jefferies continues to see Marks & Spencer Group (LON:MKS) as a ‘buy,’ pointing to recovery momentum at the blue-chip retailer, Citywire reports. The comments come as the company prepares to update investors on its full-year performance tomorrow.
Marks & Spencer’s share price has taken a hit in the run-up to the results following yesterday’s rise, having shed 2.73 percent to 292.20p as of 10:30 BST. The stock is underperforming the broader UK market, with the benchmark FTSE 100 index having climbed marginally into positive territory and currently standing 0.13 percent higher at 7,869.61 points.
Jefferies bullish on M&S
Jefferies reiterated its ‘buy’ rating on Marks & Spencer yesterday, with a price target of 370p on the shares which jumped three percent in the previous session.
“A challenging end to M&S full year 2018 is already widely anticipated, so we expect the focus at M&S full-year results to be on strategic progress and the cost of achieving these goals,” the broker’s analyst Niraj Amin commented, as quoted by Citywire, adding that the retailer’s shares had recovered about 10 percent over the past week, “to 9.8x price/earnings ratio and we seek further tangible progress on the strategy and financial comfort to build out conviction”.
The analyst, however, reckons that risks remain from a “UK consumer slowdown, execution risk during the shift in space from clothing to food, inflation, [and] rebasing food gross margin”.
Retailer to post results
The comments come ahead of Marks & Spencer’s full-year results tomorrow when the blue-chip retailer is forecast to post a drop in full-year profits. The company, which has been undergoing a shake-up under chief executive Steve Rowe and chairman Archie Norman, is further expected to speed up its store closure programme.