Marks and Spencer Group PLC (LSE:MKS) saw its price target snipped by analysts at RBC Capital Markets, who flagged rising execution risks in its Clothing unit but also strength in Food.
RBC reduced its FY26–27 earnings forecasts by between 1% and 5% and lowered its price target to 350p from 400p.
The Canadian bank's London-based analysts, in a note, said the changes reflect weaker expected margins in Fashion, Home & Beauty, slightly higher interest and tax charges, and a higher weighted average cost of capital.
RBC's view remains more constructive on Food.
Specifically, RBC said M&S is well positioned to benefit from trends towards premium, healthy and specialist products, as well as more meals prepared at home. Recent Kantar data showed solid value and volume growth, which the broker believes should support the division through the Christmas period.
By contrast, analysts are cautious on Clothing. RBC expects softer gross margin in the second half due to a longer post-Christmas sales period and ongoing stock clearance. The broker also warned that M&S risks training customers to wait for promotions, even as it tries to protect its value perception through targeted offers and loyalty schemes.
The broker note highlighted recent disruption, including a cyber incident, has increased execution risk and highlighted the need for further work on systems and supply chain in Clothing. The broker rates the shares as 'Sector Perform', viewing the current valuation as fair given higher-than-average markdown and execution risk.