Don't sell, more to come25 Aug 2021 20:37
M&S enjoying ‘robust recovery’, says Berenberg
There has been a ‘robust recovery’ at Marks & Spencer (MKS) and broker Berenberg says it is emerging from the pandemic stronger.
Analyst Thomas Davies retained his ‘buy’ recommendation and increased the target price from 195p to 200p on the stock, which continues to trade strongly after a trading update last week. The shares closed up 4.2%, or 6.8p, at 171p on Tuesday.
Davies said the latest update ‘indicated a robust recovery since the easing of restrictions’.
‘We think the continued momentum highlights the progress made to address its weaknesses, and we believe it is emerging from the pandemic a stronger omnichannel business,’ he said.
Davies said e-commerce initiatives continue ‘to drive strong online growth’, in-store food sales continue to outperform the market, and the benefits of the Ocado tie-up ‘remain underappreciated’.
‘We forecast profit before tax slightly ahead of the guided range, but recognise upside risk as workplace mobility recovers,’ he added.