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Marks & Spencer (MKS) shares are the surprise and lone absolute outperformer on the FTE this morning despite a poor Q3/Christmas update, with a shocker for General merchandise sales -5% due to unseasonal weather and intense price competition hurting footfall as peers have reported. Shares benefiting from a handful of drivers including raised profits guidance to the top-end of the range thanks to continued cautious bean-counting to support margins in the face of persistent deflationary pressures. The planned 2016 retirement by CEO Marc Bolland who has failed to turn the ‘socks ‘n’ pants’ seller around may also be seen as a positive, hoping the next guy (internal, from General merchandise) does better. Either that or investors have unwavering faith in a rebound in General Merchandise, hoping a winter chill blows soon. While Food benefited from its best Christmas ever (Xmas week +17%) this surely can’t be extrapolated for the year, however, the group is clearly making the most of its Online channel with sales +20% despite intense competition. After breaking back below 445p on Monday, support has already emerged at 427p thanks to rising lows dating back to early September 2011. Should sentiment see a bullish revival, a rebound towards 500p could be on the cards.
Mike van Dulken, Head of Research
This research is produced by Accendo Markets Limited. Research produced and disseminated by Accendo Markets is classified as non-independent research, and is therefore a marketing communication. This investment research has not been prepared in accordance with legal requirements designed to promote its independence and it is not subject to the prohibition on dealing ahead of the dissemination of investment research. This research does not constitute a personal recommendation or offer to enter into a transaction or an investment, and is produced and distributed for information purposes only.
Accendo Markets considers opinions and information contained within the research to be valid when published, and gives no warranty as to the investments referred to in this material. The income from the investments referred to may go down as well as up, and investors may realise losses on investments. The past performance of a particular investment is not necessarily a guide to its future performance. Prepared by Michael van Dulken, Head of Research
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