This report is not a personal recommendation and does not take into account your personal circumstances or appetite for risk.
Trade Parameters
Technical Observations – For
Technical Observations – Against
The current share price breakout opens the door for a return to late 2017 highs. Turnaround strategy may finally be showing benefits, helping offset a tough high street environment. Good UK weather could help with clothes and food sales, along with the World Cup. Recently partnered with Microsoft to become digital first retailer. House of Fraser closures could offer opportunities (new outlets and shoppers moving). Still in UK 100 (just) after reshuffle.
Risks to Marks & Spencer shares include a retail sector downturn, a UK interest rate rise and more cold UK weather. A 6.1% forward dividend yield is attractive, so long as it is sustainable. Any reduction in the dividend would hurt the shares, the yield having been a major support factor since the shares price lows in March.
Consensus is Bearish (41% of brokers say Sell) while 68% of brokers suggest downside from current levels. However, the a share breakout (from a 1yr falling channel) could encourage upgrades from the Neutrals and Sellers that helps push the shares higher.
Next Event: AGM (no trading statement), 10 July; First-half results, 7 Nov
Latest Broker 12-Month Consensus: 19% Buy, 41% Hold, 41% Sell (full breakdown on request)
Source: DowJones Newswires, Reuters News, Bloomberg or Company Press releases
| Share | 1wk | 1m | 3m | 6m | 1yr | 2yr | 3yr | 4yr | 5yr |
| Perf % | 3.1 | 7.3 | 16.0 | 0.1 | -7.7 | 1.7 | -42.6 | -29.2 | -32.8 |
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Prepared by Michael van Dulken, Head of Research