For investors who want to ride the potential recovery in the UK economy, Marks and Spencer Group PLC (LSE:MKS) could be an ideal choice, suggested analysts at investment bank Jefferies.
Results from the food and clothing retailer's online grocery joint venture, Ocado Retail, are due on Thursday and overall interim results for M&S are scheduled for early November. They "should deliver another half of sustained market share growth", said Jefferies.
Analysts upped their pre-tax profit forecast to £367 million, which they think is roughly in-line with the average of other City buyside analysts, and have consequently hiked their share price target to 410p from 330p.
"We think MKS is now a far stronger business than was historically the case. This newfound strength is built on an expansion of the food offer which is clearly resonating strongly," they said.
Also, the Clothing & Home wing "seems to have righted many previous wrongs" as management focuses on backend operations to reduce a previous mismatch between what consumers want and the products that were on offer.
"Growing market share and margins in both core businesses should help underpin both earnings expansion," they added.
M&S shares are up almost two-thirds over the past 12 months and are roughly double their pre-pandemic levels.