Marks & Spencer share price: Investors await full-year results

Marks & Spencer Group (LON:MKS) is largely expected to post a fall in profits when it updates investors on its full-year performance this week. The update will come after the high street retailer recently struck a £1.5-billion online food joint venture with Ocado (LON:OCDO).

Marks & Spencer’s share price has been little changed in early morning trade this Tuesday, having inched 0.09 percent lower to 267.57p as of 08:04 BST. The stock is underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.11 percent higher at 7,356.87 points. The group’s shares have given up more than eight percent of their value over the past year, as compared with about a 5.5-percent dip in the Footsie.

M&S results preview

Marks & Spencer is set to post its preliminary results on Wednesday and Reuters reports that analysts on average expect the high street retailer to report a pretax profit before one-off items of £519 million for the financial year to March 31, 2019, down from the £581 million made in 2017-18. They are also forecasting a fall of 1.4 percent in like-for-like clothing and home sales, while like-for-like food sales are forecast to have fallen 2.4 percent, partly reflecting management’s moves to make the business more competitive by cutting prices.

“The downward trend to estimates is clearly unhelpful for M&S and needs to be slowed and reversed for the shares to perform,” analysts at Barclays said, as quoted by Reuters.

The Guardian meanwhile quoted UBS as commenting in the run-up to the results that M&S was likely to be a better proposition in the coming years thanks to the online platform with Ocado, while warning that there were ‘plenty of moving parts’ in the new business model.

Analyst ratings update

UBS reaffirmed the high street retailer as a ‘neutral’ on last week, without specifying a target on the Marks & Spencer share price. According to MarketBeat, the blue-chip group currently has a consensus ‘hold’ rating and an average price target of 275.38p.