- Investors fret over suspension of M&S online sales ahead of annual results
- But analysts continue to rate the retailer highly after years of bumper gains
Marks & Spencer shares have endured double-digit losses since the retailer revealed it was the target of a cyber-attack that has hobbled trade in recent weeks.
Before the attack was revealed on 22 April, the high street stalwart had seen shares rocket more than 300 per cent from a September 2022 low.
M&S’s stock market value was then driven sharply into reverse, as it had to suspend sales on its website and apps as part of efforts to manage the impact of the attack.
The group’s online presence is a key driver of its crucial clothing and homeware business, and investors are concerned about the ramifications for sales as the fallout extends into its third week.
M&S shares are down 11.2 per cent to 363.8p since 22 April.
However, the stock is highly rated among analysts and April’s slump could provide a buying opportunity.
Troubling time: M&S has seen shares fall since revealing the cyber attack last month
How is M&S faring?
M&S shares had taken a tumble in March, as UK retailers sold off after Asda’s warning of weaker earnings this year sparked investor fears of a destructive supermarket price war.
They then surged in April as investors decided those fears were overdone. And later this month the group is expected to post earnings before nasties above £1.5billion for the first time on revenues of £13.7billion for the year to 31 March, up from around £1.4billion last year.
The retailer has enjoyed bumper growth in recent years on the back of boss Stuart Machin’s revamp of its popular food offering, as well as market share gains and stronger margins in clothing and home.
M&S is highly rated among analysts
Analysts rate M&S highly
M&S boasts a Stockopedia StockRank of 95 out of 100, meaning it is one of the most highly rated companies available on the market, according to the share analysis site.
It has a ranking of 94 on both a quality and momentum basis, but a value rank of 49 suggests analysts don’t think M&S looks particularly cheap even after the stock’s recent dip.
Rebound: M&S sales have roared back from their Covid-era low
It is ranked 7th out of 10 rivals on a price to book value basis, and 9th in terms of price to sales.
Nevertheless, 10 out of 17 brokers tracked by Stockopedia rank M&S as a buy, while four say the retailer is a ‘strong buy’. Three maintain a hold rating on the stock.
Peel Hunt holds an M&S buy rating with a target price of 450p, reflecting potential upside of almost 25 per cent.
Analyst John Stevenson thinks the retailer’s recent cyber woes are unlikely to dent the brand’s progress.
He said: ‘I don’t believe people change their shopping habits long term as a result of [incidents like this]. It all depends on how quickly M&S can get back to normal but in terms of the brand I don’t think there’s necessarily going to be any long term damage.’
Analysts at Shore Capital said in March, before the cyberattack occurred, that both food and clothing and home sales ‘are still going very well [and] still gaining market share’.
They wrote in a 27 March note: ‘M&S is in good shape, to us, reflected in the narrative of management.
‘That said, it is not a case of job done, with self-help needing to be seen through, competitive priorities having to be addressed as necessary, and growth opportunities ceased.
‘The firm does so with a strong financial constitution with scope for building optionality around shareholder friendliness in time.’
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This article was originally published by a www.dailymail.co.uk . Read the Original article here. .