Marks & Spencer share price rallies as Citigroup turns bullish on retailer
Shares in Marks & Spencer Group (LON:MKS) have jumped more than three percent in London in today’s session, outperforming the broader market, after analysts at Citigroup turned bullish on the stock. The move is a boost for the company, which unveiled plans to close dozens of stores at home and abroad last week as part of chief executive Steve Rowe’s overhaul of the business.
As of 13:35 GMT, Marks & Spencer’s share price had added 3.85 percent to stand at 339.80p, as compared with a 0.27-percent rise in the blue-chip FTSE 100 index. The retailer’s shares have lost more than a third of their value over the past year, and are down by about a quarter in the year-to-date.
Citigroup lifted its rating on Marks & Spencer from ‘neutral’ to ‘buy’ today, and hiked its price target on the shares from 325p to 365p, explaining that while it remains cautious on the retailer’s plans to sustainably reignite sales growth, it has become more confident about delivery on the UK store plan and sees opportunity on central cost savings.
Last week, Marks & Spencer announced plans to exit its loss-making owned operations across 10 markets, with the move expected to result in 53 store closures. At home, the FTSE 100 retailer plans 30 full-line closures, and downsizing or replacing around 45 full-line stores to Simply Food stores.
“With the stock down around seven percent since the strategy update, investor concerns look overdone,” Citigroup said, as quoted by Sharecast. “Our buy rating is predicated on MKS being able to deliver on its strategic elements whilst maintaining its returns within the Food business. But we see limited downside to the shares at this level and upside from potential upgrades of around 25 percent over the medium term if MKS delivers.”
As of 14:06 GMT, Monday, 14 November, Marks and Spencer Group Plc share price is 340.00p.