Marks and Spencer Group PLC (M&S) saw its shares fall by 2.3% at 119.10p in late afternoon trading after analysts at Deutsche Bank cut their target price for the high street retailer to 145p from 155p following the recent profit warning from its joint venture with Ocado Group PLC.
In a note to clients, the Deutsche Bank analysts said: "We find it hard to believe that these same consumer and cost pressures will not be felt by M&S in its core Food business and to a lesser extent in Clothing. We took a cautious view on M&S back in April given these issues and we see no reason to change that view until we see the actual evidence of the consumer slowdown on the core business."
The analysts said they lowered their full-year 2023 pre-tax profit estimate for M&S by around 8% and full-year 2023 pre-tax profit estimate by around 7% leading to the reduction in price target to 145p, while retaining a 'Hold' rating on the FTSE 250-listed stock.
11.50am: Naked Wines shares laid bare
Shares in Naked Wines plunged 34.5% in late morning trade after announcing plans for a financial and operational review alongside the surprising departure of non-executive director, Pratham Ravi.
Ravi represented the group’s largest shareholder and only joined less than three weeks ago.
The online wine retailer said it will provide an update on the plans alongside a trading statement due on the week commencing 17 October.
Analysts at Liberum Capital said “something has gone somewhat awry” with the departure of Ravi and suggested the trading update in October could be “rather negative.”
The broker repeated a 'Sell' rating on Naked Wines and cut its price target to 100p from 150p after the latest update citing its “weak balance sheet, question marks around the covenants in quarter one, liquidity and going concern issues and also how the group will drive liquidity in quarter two.”
10.00am: Record profits boost Dunelm shares
Homeware retailer Dunelm Group PLC (LSE:DNLM) was a rare riser on Wednesday after reporting a 32.4% rise in full year pre-tax profits to a record £209mln, on total sales of £1.6bn, up 16.2% on the year.
The retailer said its active customer base grew 8.5% over the year and paid a final dividend of 26p a share, up from 23p a year earlier.
Shares advanced 3.4% to 745p bucking the weak market trend.
Chief executive Nick Wilkinson said: "We feel confident and well prepared to weather the current economic pressures.”
“That said, the operating and economic environment is extremely challenging.”
Dunelm said sales have remained "robust" in the first 10 weeks of the new financial year and that it's on track to deliver full year 2023 results in line with analysts' expectations for pre-tax profit of £178mln.
Analysts at Peel Hunt were upbeat: “There is no sign of trading down, or weakness in any category” it said.
“Indeed, Dunelm enters full year 2023 with record brand awareness, active customers and an intent to double down on value.”
“We see strong market share growth and a 35+% three-year dividend return” the broker added.
9.05am: Aston Martin hit by possible legal action
Aston Martin Lagonda topped the FTSE 250 fallers on Wednesday after reports that is facing a lawsuit from two former dealers.
The Financial Times said the two former dealers claim they are owed about £150mln for underwriting the development of its troubled Valkyrie hypercar, .
The luxury car maker revealed that Nebula Project AG (a Swiss company owned by Andreas Baenziger and Florian Kamelger) had filed a case against Aston in London, the report said although details are not public.
The case centres on a deal to underwrite the development of the £2.5mn Valkyrie hypercar, according to two people with knowledge of the matter, the FT said.
When the carmaker began developing the Valkyrie in 2016 it turned to Baenziger and Kamelger to underwrite the project.
They were guaranteed royalty payments of about 3%, worth about £150mn, once the cars were on sale, according to three people with knowledge of the arrangement at the time.
However, last year Aston claimed the pair had withheld Valkyrie customer deposits from the company, and sued them to recoup the £15mln it said it was owed.
At the same time, it cancelled the contract.
The FT quoted a statement on Tuesday evening from Aston chair Lawrence Stroll who said: “We are confident in our legal position and believe their counterclaims are retaliatory and without merit.”
8.15am: Deutsche downgrade hits abrdn
Shares in asset manager abrdn PLC were a weak feature on Wednesday, falling 3.7% to 143p, hit by a downgrade by Deutsche Bank.
The broker has taken a more cautious stance on the company, downgrading the stock to sell from hold with a reduced price target of 135p, down from 175p.
Analyst Rhea Shah said there are downside risks to the shares from both an earnings and capital perspective with a 25% cut to the dividend now forecast beginning with the final payout for 2022.
Additionally, Deutsche also values the excess capital locked within the Indian stakes at a 5% larger discount to reflect concerns around the uses of sale proceeds.