This is Not Just a Stock of the Week: M&S

VIDEO: M&S' share price is higher this year, but long-term investors have been here before

Sunniva Kolostyak 21 August, 2023 | 9:55AM
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Sunniva Kolostyak: This week, the stock in focus is Marks and Spencer (MKS). The retailer is currently making headlines on the back of an ad hoc trading update earlier this week, where it lifted its annual profit forecast. The share price jumped more than 10% in reaction and is now close to doubling since the start of the year.

In this trading update, M&S reported continued market share growth – around 6% for clothing and home, since the start of its financial year, and 11% for its food business.

So, what does this mean for investors. Morningstar’s analysts have not changed their fair value estimate of £1.85 per share. M&S is now trading at around £2.30, meaning it’s slightly overvalued. Long term investors though, will have seen many false dawns from M&S over the years, the last being in 2015.

On the other hand, the recent rally means M&S could be looking at a re-entry to the FTSE 100, almost four years after it was demoted. M&S’s market cap currently fits the bill, and the next reshuffle is only a month away. This also depends on whether grocery partner Ocado's revival continues. For now, investors are willing to back the upbeat case for M&S.

For Morningstar, I’m Sunniva Kolostyak.

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Sunniva Kolostyak

Sunniva Kolostyak  is data journalist for

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