Interactive Investor argues that Marks & Spencer Group (LON:MKS) can continue to make share price gains if it provides more evidence it is delivering on turnaround promises, Citywire reports. The comments came after the blue-chip retailer posted its interim results yesterday, revealing that its sales had continued to fall in the first half of its financial year, and noting that it expects little improvement for the full year.
Marks & Spencer’s share price closed in negative territory in the previous session, giving up 0.53 percent to 300.90p. The shares underperformed the broader market rally which saw the benchmark FTSE 100 index gained 76.60 points to close 1.09 percent higher at 7,117.28.
Group needs to deliver
Citywire quoted Interactive Investor analyst Lee Wild as commenting yesterday that while M&S’ clothing sales were still falling, “the masterplan is in its very early stages”.
“This is about getting the basics right. Do that, and everything else is at least built on solid foundations,” the analyst continued, adding that there has been “enough optimism around M&S shares recently to force a break above an 18-month downtrend and, while the FTSE 100 has been flat the past fortnight, M&S is up over” seven percent. The analyst reckons that further gains would hinge on the retailer “successfully tackling the decline in sales and providing further evidence it is delivering on its promise”.
Other analysts on retailer
Reuters meanwhile quoted analysts at Liberum as commenting that any path to recovery for Marks & Spencer continued “to look long and uncertain”.
“On the food side, we think investment in technology in stores is not going far enough,” the analysts elaborated, pointing to “longer term pressures from the likes of Amazon-Go and the rise of takeaway platforms such as Just Eat and Deliveroo”.