Marks and Spencer Group PLC (LSE:MKS) reports half-year results are scheduled for November 5, but UBS is not expecting fireworks.
The Swiss bank reckons the figures will be messy after the summer cyber incident, but should mark a turning point rather than a setback for the retailer’s longer-term story.
The attack disrupted online clothing operations for about three months and dented food availability for around one, yet UBS believes the damage is limited.
“We think around one month of lower availability in food and around three months of disruption in Clothing Online may have caused a minor dent in customer perception or loyalty but not structural damage,” it said.
All operations were back to normal by mid-August, and UBS expects the market to look through the noise in the results to recent trading trends.
Before the cyberattack, Marks & Spencer was leading the UK market in both food and fashion share gains. The latest data from UBS’s consumer survey shows the retailer still ranking best in class on quality perception and customer satisfaction alongside Tesco.
UBS expects profit before tax of about £612 million for the year to March, below the £654 million consensus estimate, reflecting the one-off cyber costs.
Even so, it kept its buy rating and 435p price target, arguing that Marks & Spencer offers “one of the best risk/reward” profiles in UK retail at 10 times expected 2027 earnings.
The broker does not expect upgrades from these results but believes investors will start to focus on the next phase of the turnaround.
With low expectations, improving food sales and a strong store rotation strategy, UBS sees the shares as well placed once the short-term disruption fades.