Marks & Spencer Group PLC (LON:MKS) has had its target price cut to 125p from 200p by analysts at Peel Hunt, who predicted that the company’s preliminary results on 20 May “will be dark” and forecasts will “continue to fall” as the coronavirus pandemic impacts the retailer.
In a note on Friday, the broker also retained its ‘hold’ rating, saying the FTSE 250 firm had suffered a tough end to its 2020 financial year and a tough start to its current year, with its home and clothing businesses completely closed down during the UK’s lockdown.
READ: Marks & Spencer awards store staff 15% bonus for work during coronavirus epidemic
“Online will have picked up a tiny bit of slack, but we wouldn’t be optimistic of the impact”, Peel Hunt said, adding that the clothing arm will be facing a “serious stock overhang this summer”.
“Whilst there are a number of retailers that are worth a punt at the moment, we don’t think M&S is one of them. We initially were blinded by the thought that the food side would carry non-food, but that was a fanciful notion”, analysts said, concluding that investors should “look elsewhere”.
“In some lights you can argue that M&S looks cheap, but crises like this play to the more nimble retailers’ strengths and despite the progress made in streamlining, nimble M&S ain’t”, they said.
Shares in M&S were 4.6% higher at 97.7p in late-morning trading.