Marks and Spencer Group PLC (LSE:MKS)’s next major growth opportunity could be in the kidswear market as investors await the retailer’s latest move to build on strong momentum recently.
JPMorgan analysts noted on Monday that a 40% year-to-date gain in the company’s shares had left questions about what was next to come from the retailer.
This could well be in kidswear, according to analysts, given M&S’s 7% share in the market currently against rival Next PLC (LSE:NXT)’s 14%.
“We see ‘low hanging fruit’” in the kidswear segment, JPMorgan said, after M&S “has shown clear and sustained evidence of improved performance” in its food and clothing & home wings for “over a year now”.
JPMorgan also raised its 2025 pre-tax profit forecast for M&S by 4% to £810 million, adding “at least low-single-digit growth in both divisions [was] underpinned”.
M&S’ share price target was hiked from 360p to 425p as a result, with JPMorgan reiterating an ‘overweight’ rating
Shares climbed by 0.5% to 384.6p on Tuesday.