Marks and Spencer Group PLC (LSE:MKS) (M&S) saw its shares fall on Wednesday after analysts at Deutsche Bank cut their target price for the high street retailer to 145p from 155p.
The bank retained its 'hold' rating on the FTSE 250-listed stock, following another profit warning this week from its joint venture with Ocado Group PLC (LSE:OCDO).
In a note to clients, the Deutsche Bank analysts said: "The sales and cost pressures described by Ocado Retail in its 3Q statement do not come as a surprise as they have been highlighted by management at each trading update this year.
"The inflationary environment has clearly worsened for consumers and we expect the trading down seen by Ocado (inflation up +7% offset by -2% trading down in mix to give ASP up 5%) and fewer items per basket to reflect the consumer pressures."
They added: "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 have lowered their full-year 2023 pre-tax profit estimate by around 8% and full-year 2023 pre-tax profit estimate by around 7% leading to the reduction in price target to 145p.
The analysts concluded: "At some stage, these factors will be 'in the price' but we think sufficient uncertainty remains with regards short-term consumer behaviour."
In late afternoon trading, M&S shares were 2.3% lower at 119.10p.