Barclays reiterated its 'overweight' rating and target price of 215p for Marks and Spencer Group PLC (LSE:MKS), noting that a flat share price over the last 12 months does not reflect the good progress made by the retailer.
Shares are currently trading at 158.5p, up 4% from the same time last year, but that isn’t a cause of too much concern for the broker.
The reason, according to the analysts, is that M&S is “more in the quality than price camp within the retail sector.”
However, while that may lead to a portion of the market being priced out of its products, it may also push the even more “affluent customer base” to trade into M&S as the ‘cheap’ option.
Barclays expects profit before tax for the year to come in at £525mln, slightly ahead of previously set guidance by the retailer of at least £500mln, as well as sales to grow in all forecasted years.
Profits for the following year, 2022/23 are forecast to retreat slightly due to the absence of the business rates relief and lower Ocado joint venture contribution, as well impacts from international sales and its Russian franchises.