Marks & Spencer rating raised to 'buy' at Societe Generale

UK food and clothing retailer Marks & Spencer had its rating promoted to 'buy' from 'hold' over at French investment bank Societe Generale on Tuesday.The bank said its upgrade comes after it underestimated the short-term like-for-like sales recovery potential of M&S by around two percentage points."The Q4 trading statement released on 2 April showed the first quarter of online sales growth since M&S took over running its website from Amazon just over a year ago. Against soft comparatives in online well into next year, we now see a year ahead of greater improvement in LFL sales trends than we expected," said SocGen.The bank raised its target price on the stock to 640p from 524p."We anticipate further gross margin gains on the back of supply chain restructuring and we continue to believe that M&S is capable of multi-year surplus cash returns. Putting all of this together, we see upside for the valuation," the broker added.