logo-loader

Is Marks & Spencer as bad as its share price suggests?

M&S still a buy, Hurricane Energy, Redrow, Amec Foster Wheeler

picture of M& S food hall
More food but should be even less clothing says Haitong
Is Marks & Spencer as bad as its share price fall suggests?
 
No, say the analysts at Haitong Research though they admit that turning around a juggernaut like M&S (LON:MKS) will take time.
 
The broker would have liked chief executive Steve Rowe to have wielded the axe even harder and closed more its of UK clothing space rather 
 
“10% over five years is not that much in the context of UK Clothing and Home sales densities in-store (excluding online) down 20-25% over the last five years - but we can see that there are reasons for management taking a less aggressive stance. “
 
We do think though that the company would have seen its plans better received if it had given a clearer analysis of its assumptions for market growth, online penetration etc.,  rather than relying on the “Trust Us, We Know What We Are Doing” approach evident.
 
Haitong is a buyer even so with a 375p fair value estimate.
 
Housebuilder Redrow (LON:RDW) has 40% upside  according to  Peel Hunt, which has upgraded it forecast after a strong selling season this autumn.
 
The broker now expects profits this year of £280mln and  has upgraded its forecast by 3% for the following two years. 
 
Shares are trading on 20% discount on a price to asset value basis, which is good value and the price target of price target of 555p implies over 40% upside. 
 
Macquarie has turned more bullish on contactor Amec Foster Wheeler  (LON:AMFW) with an upgrade to 'Neutral'.
 
The broker has been a seller ut said the the stock has now sufficiently de-rated following last month's disappointing trading update. 
 
Cantor Fitzgerald notes that Following the successful completion of the Lancaster 7 wells, Hurricane Energy PLC (LON: HUR) has announced the spudding of its first Lincoln well. 
 
This is a material prospect for the company with the last CPR estimating a prospective resource base of 150MMbbls, which could be as high as 250MMbbls assuming the Lincoln prospect is analogous to the Lancaster field. 
 
The presence of oil at 2,135m TVDSS indicates a continuous oil column to this depth and therefore the company can take sufficient comfort in this higher estimate. 
 
Buy with a 69p target.
 
UBS is a buyer of Royal Dutch Shell PLC (LON:RDSB) with a 2,250p) following its New York Investor Day.
 
Shell is still targeting US$20-25bn of organic free cash flow (US$20-30bn disposals) and 10% return on capital by the end of the decade in a $60/bbl oil price scenario, which would more than cover the $16bn all-cash dividend. 
 

Add related topics to MyProactive

Create your account: sign up and get ahead on news and events

NO INVESTMENT ADVICE

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is...

FOR OUR FULL DISCLAIMER CLICK HERE

Watch

Global Energy Metals in London discussing plans to develop cobalt projects...

Global Energy Metals Corporation (CVE:GEMC) (OTCMKTS:GBLEF) CEO Mitchell Smith caught up with Proactive's Andrew Scott while in London to update shareholders on progress within its portfolio of cobalt and battery metal projects. Smith says the firm's well-placed to take advantage of the...

18 hours, 13 minutes ago

RNS

Half-year Report

2 weeks, 2 days ago

Directorate Change

2 weeks, 4 days ago

Total Voting Rights

3 weeks ago

Director/PDMR Shareholding

3 weeks, 3 days ago

Total Voting Rights

on 1/10/19

Investor Morning

on 1/10/19

3 min read