Marks & Spencer gains on triple upgrade
By Geoffrey Smith
Investing.com -- Marks&Spencer (LON:MKS) stock rose nearly 4% on Wednesday after the U.K. retail stalwart received three upgrades from various brokerages, citing a slightly better outlook for the U.K. economy and the company's ongoing progress in restoring its brand power.
Citigroup analysts raised their price target on the stock from 150 pence to 175p, some 19% above Tuesday's closing price, on expectations that the company's £400 million (£1=$1.2229) cost-saving plan will help it defend margins at a time when the ongoing cost-of-living squeeze is expected to make it harder for companies to pass through price increases.
The group had said in January that it had largely managed to keep pace with inflation over the key Christmas period, with sales rising 9.9% from a year earlier. It noted that clothing and home sales, up 8.6%, were "well ahead of the market".
Clothing, the company's staple, was one of the categories highlighted for strong inflationary pressure earlier on Wednesday by the Office for National Statistics, as it announced that inflation had accelerated to 10.4% in February.
Exane analysts meanwhile raised M&S to neutral from underperform after an annual survey it commissioned showed the biggest improvement in brand perceptions among the companies it tracks. By contrast, the survey showed no evidence of brand recovery at two big rivals, Next (LON:NXT) and Primark.
Goldman Sachs also upgraded the stock.
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