Marks and Spencer Group PLC (LSE:MKS) continues to receive plaudits and upgrades in equal measure from City analysts impressed with the retailer's latest numbers.
Deutsche Bank highlights how much the retailer’s stock has risen actually as well as reputationally over the past twelve months in a bullish follow-up note to yesterday’s update.
At the beginning of the year, notes the bank, consensus was looking for profits of £400m but that total ended at £716 million or £740 million if the pension credit is included.
Earnings expectations have been managed conservatively, notes the bank, but other indicators underline the strength of the recovery.
“In addition to the earnings momentum, M&S has returned to an investment grade credit rating, moved to net cash (ex-leases) given strong free cash flow, tightened up its capital discipline and started to pay a token dividend.”
Deutsche Bank has upped its 2025 profit forecast by 7% to £780 million (£64 million increase yoy vs c.£40 million consensus) and in 2026 by 3%.
Trading on 10 times calendar 2025 PE and a 5.5% cashflow yield "there is a lot to like" adds Deutsche, increasing its target price to 350p (from 315p).
“We re-iterate M&S as one of our most preferred stocks,” added the bank.
Shares rose 0.7% today to 290p.