Marks & Spencer share price: Analysts flag headwinds ahead

on May 25, 2017
Updated: Oct 21, 2019

Marks & Spencer Group (LON:MKS) is facing some pretty big headwinds ahead, analysts at Hargreaves Lansdown have said. The comments came after the blue-chip retailer unveiled a hefty full-year profit slump yesterday, with the group’s performance pressured by restructuring costs.

Marks & Spencer’s share price rose in yesterday’s session adding 1.47 percent to close at 393.40p, outperforming the broader London market, with the benchmark FTSE 100 index closing marginally higher. The group’s shares, however, remain down by more than 10 percent over the past year.
Hargreaves Lansdown noted yesterday that it believed that the outlook for M&S was not good. The comments came as the blue-chip retailer reported that its full-year profit before tax had tumbled 63.9 percent, as the company suffered restructuring costs, property impairments and lower clothing sales, with chief executive Steve Rowe looking to turn around the company’s fortunes.

Citywire quoted the broker’s analyst Laith Khalaf as saying that Rowe was “pulling out all the stops to turn performance around but restructuring the business comes at a cost” and that the company was also facing “some big economic headwinds” such as the fall in sterling pushing up the price of food and clothes while consumer incomes were squeezed.
“The high street is also in decline as more of us turn to our mobiles and tablets to do our shopping, which leaves M&S fighting an even steeper uphill battle,” the analyst continued, adding that this painted “a pretty gloomy picture for the high street retailers for the foreseeable future”.
Shore Capital meanwhile continues to see M&S as a ‘hold’, without specifying a price target on the stock, while Peel Hunt reaffirmed the blue-chip retailer as a ‘buy’ yesterday, valuing the shares at 500p.
As of 07:54 BST, Thursday, 25 May, Marks and Spencer Group Plc share price is 384.89p.

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