Marks and Spencer’s “transformation efforts are beginning to deliver structural improvements” according to UBS.
The broker hiked the target price to 200p from 120p, although it remained neutral on the stock.
“Trading, costs and cash all were strong” when the retailer posted full-year results, suggesting transformation efforts are starting to pay off.
In food, gross margin investment, greater store space and full control of the supply chain is driving strong sales.
While in clothing and home, better buying and merchandising strategy is helping M&S hold onto a much stronger full-price sales mix, UBS said.
Shares, up 48% in the year to 190.4p, are “fairly valued” and reflect the strong progress made already.
Data from UBS also suggests that M&S’ perception compared to Tesco is close to multi-year best, viewed as 7% more expensive in food, and suggests its gross margin investment helped it gain traction.