Marks and Spencer Group PLC has been downgraded from a ‘buy’ to a ‘neutral’ rating by CitiGroup analysts over concerns that demand will deteriorate in the coming years.
“Whilst we continue to view M&S's transformation positively, we also continue to expect the demand environment to deteriorate across 2023 and into 2024,” the bank said.
FTSE 250-listed M&S is undergoing a five-year transformation plan in a bid to “modernise” supply chains and store locations, including through closures, with investments topping £819mln as of April 2022.
Despite this, Citi also lowered the retailer's share price target from 175p to 170p, up 3.75% on Thursday’s opening, suggesting higher than anticipated taxes could weigh into earnings.
M&S shares fell 1.6% on Thursday morning to 161.25p.