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After only a quick glance, a negative I could see was the margin decline in mobile money by a couple of percentage points.

How does the US job markets affect the underlying business of M&S?

Also known as traders

Inclusion of Ocado in the reporting

Their repurchases are carried out by Barclays and at their discretion, which I don’t personally like. I’d hope that Airtel have certain valuations that they don’t want their shares repurchased above, so perhaps it is this reason as the valuation is looking high, historically, and they believe that any repurchases at this valuation won’t create value for shareholders.

Jimjam, and the other man, you’re both looking at this purely from a share price perspective and re rating of the multiple.

You cannot predict a share price, no matter how much you want to. Just because M&S was at a certain price at one time, it doesn’t mean it deserves to be there again. That’s called price anchoring. The cyber attack changed the outlook , its short-term forwards earnings will be like be quite subdued with margin compression from discounting. You can argue it’s been “priced in”, but nobody has seen the results yet, it’s all guess work. The best analysts at the best firms in the world are awful at it predicting share prices. Step away from the technical charts and do some real, qualitative and quantitative deep analysis.

The confirmation bias is astounding.

Do you know anything about valuation? You keep quoting market cap but all that is, is share price and number of shares.. nothing else. I’m happy to be proven wrong, but 53% growth in two years for a retailer in this economy. Wishful thinking.

I’m adding to Topicus. The rest of my portfolio:

Norbit

Airtel Africa

Tecnoglass

Sygnity

Xometry

Berner Industrier

Dino Polska

Made Group

Poper Co

Teqnion

Computer Modelling group

I have done plenty of research. Sold my shares today for a 100% return to reinvest in better opportunities.

So you’re banking on quite a massive re-rate there? Say M&S grows at a conservative 7% over the next 2 years, so a 14.5% CAGR. Which I don’t believe anyone could say with much conviction it will grow beyond that based on its returns on capital.

At currents valuations, PE to make it easy although it’s a very flawed metric, M&S would have to re-rate to a PE of near 60 to reach your £10 in 2 year estimation. That is incredibly unrealistic in such a mature and low-growth industry.

I appreciate you telling me to “DYOR”, but if you’re using AI to do your research and it tells you a mature retailer is going to triple its market cap in 2 years and you believe it.. well.

Where do you get a £5.20 target from? That would require around 53% growth in EPS growth at current valuation over the next two years.

If you ignored looking at the share price, what would you do? Therein lies your answer.

Can you explain why you wouldn’t buy at that price?

How do you predict a share price based on whether customers like a website?

So long as they can achieve, and in some instances exceed their hurdle rates, then they are increasing value. I’d be interested to see whether these stores were purchased or if acquired by lease. The former being the more preferred.

Great post.

The recent impairment charge has been playing on my mind as it signifies poor previous capital allocation. I think in hindsight, the joint venture with Ocado was a poor decision. However, the purchase was made under previous management and I believe Stuart Machin’s team have made far better capital allocation decisions since, evidenced by their impressive cost savings, acquisition of Gist, and returns on invested and incremental capital.

I’d further argue that M&S has an international problem that is a drag on value accretive growth. I don’t believe M&S has the global brand attraction that previous management teams believed it had. We have been notified of a ‘reset’ of International for the last couple of years to no avail. I would personally welcome a one-off restructure in this segment.

It depends on how much you value non-cash expenses in the form of impairments. It is a rather large impairment though, which doesn’t bode well. Personally I find that it’s more important to analyse the cash flow and how those earnings are created. It gives a far better indication of whether they’re creating value.

Don’t use the PE ratio to invest. It is incredibly flawed.

Analyst ratings are seldom accurate. Price drives their narrative so take no notice.

Why do you use EBITDA considering the amount of relative capex for FY24 & 25. It is not a good indicator of financial performance.

M&S is a 165% gain for me at the moment. Why would I consider the massively loss inducing method of trading?

I will never understand those that trade stocks. I wonder how many would have made a far greater profit by buying at a fair price and letting the compounding take place.

This was an obvious buy under £1.50 and there was absolutely no reason to trade it all the way up it’s re-rating to £4. It is likely now trading at fair value, but the business continues to improve, so I see no reason to sell here yet.