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Marks and Spencer
(LSE:MKS)
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Rating:57Neutral
Price Target:
437.00 p
▲(10.69% Upside)
Action:Reiterated
Date:08/22/26
The score is driven primarily by a solid but weakening financial profile (margin and free-cash-flow deterioration alongside moderate leverage). Technicals add a modest drag due to negative momentum, while valuation is a clear headwind given the high P/E and low yield. Earnings-call commentary is mildly supportive on reinvestment and Food momentum, but near-term profitability and execution risks remain significant.
Positive Factors
Strong revenue recovery
Sustained top-line growth indicates that M&S is rebuilding customer demand and strengthening its position across Clothing & Home and Food. Continued revenue expansion provides a broader base for operating leverage, supports reinvestment, and improves the durability of earnings recovery over the next several quarters.
Negative Factors
Margin compression
The sharp reduction in profitability shows that revenue growth is not currently translating proportionately into earnings. Persistent cost or pricing pressure could limit operating leverage, reduce the returns generated by expansion, and make future profit growth more dependent on successful efficiency and mix improvements.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong revenue recovery
Sustained top-line growth indicates that M&S is rebuilding customer demand and strengthening its position across Clothing & Home and Food. Continued revenue expansion provides a broader base for operating leverage, supports reinvestment, and improves the durability of earnings recovery over the next several quarters.
Read all positive factors
Marks and Spencer (MKS) vs. iShares MSCI United Kingdom ETF (EWC)
Market Cap
£8.52B
Dividend Yield1.02%
Average Volume (3M)7.79M
Price to Earnings (P/E)33.5
Beta (1Y)1.17
Revenue Growth25.02%
EPS Growth-13.12%
CountryUK
Employees51,405
SectorConsumer Cyclical
Sector Strength84
IndustryDepartment Stores
Share Statistics
EPS (TTM)0.12
Shares Outstanding2,080,557,900
10 Day Avg. Volume6,292,806
30 Day Avg. Volume7,790,726
Financial Highlights & Ratios
PEG Ratio-1.96
Price to Book (P/B)2.27
Price to Sales (P/S)0.40
P/FCF Ratio15.27
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
£454.00Price Target Upside14.99% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering7
EPS Forecast (FY)0.33
Revenue Forecast (FY)£19.04B
Marks and Spencer Business Overview & Revenue Model
Company Description
Marks and Spencer Group plc is a prominent and diversified retailer, organizing its operations across five key segments: UK Clothing & Home, UK Food, International, Ocado, and a collective 'All Other' division. The company's food offerings are ext...
How the Company Makes Money
M&S makes money primarily by selling goods to consumers across two main retail businesses: Clothing & Home and Food. Revenue is generated at the point of sale through stores and online channels (including home delivery and click-and-collect), with...
Marks and Spencer Earnings Call Summary
Earnings Call Date:May 20, 2026
(Q4-2026)
| % Change Since: |
Next Earnings Date:Nov 04, 2026
Earnings Call Sentiment Positive
The call presents a cautiously optimistic tone. Strong performance and momentum in Food (7% sales growth, market share gains to 4.1% and GBP 1bn M&S-on-Ocado milestone), maintained net funds and positive operating cash flow are clear positives. The business is reinvesting heavily (GBP 650-750m planned) into stores, supply chain and D&T with concrete capacity additions (1.7m sq ft food DC space, Lichfield fashion DC) that should support medium-term margin and service improvement (material benefits expected from FY'28). However, significant short-term challenges remain: Fashion, Home & Beauty is down materially for the year (FHB -7.7%, online -18.4%), international sales are weaker, margins — particularly in everyday food items — are under pressure, and the group faces meaningful tax, regulatory and inflationary headwinds that compress near-term profitability. Given the substantive positive operational wins in food, progress on transformation, and a generally constructive outlook from management that profits should grow versus two years ago, the highlights marginally outweigh the lowlights.Positive Updates
Group sales growth (reported and organic)
Total group sales: GBP 17.4bn, up 20% year-on-year driven by Ocado Retail consolidation; excluding Ocado Retail sales: GBP 14.2bn, up 1.9% versus prior year.
Negative Updates
Fashion, Home & Beauty underperformance
FHB sales declined 7.7% year-on-year; store sales down 2.3% and online sales down 18.4% for the year (though both channels showed growth in Q4).
Read all updates
Q4-2026 Updates
Positive
Negative
Group sales growth (reported and organic)
Total group sales: GBP 17.4bn, up 20% year-on-year driven by Ocado Retail consolidation; excluding Ocado Retail sales: GBP 14.2bn, up 1.9% versus prior year.
Read all positive updates
Company Guidance
Guidance summary: Management plans to reinvest for growth with capital expenditure of £650–£750m net of disposals this year (maintenance CapEx ~£150m; property ~£200m; supply chain ~£200m; D&T ~£140m), while maintaining a net funds position (ex‑leases) and targeting profit growth versus FY25 (mid‑single‑digit implied). Key operational targets include opening 18 new larger food stores (after 12 new/18 renewed last year), delivering 2–3ppt of sales from non‑like‑for‑like space, and continuing a £120m cost‑out programme. Food aims to keep net gross margin ~4%+, having grown sales +7% (volume +3.5%) to lift market share to 4.1% (4.6% incl. Ocado) and M&S on Ocado sales rose 17% to £1.0bn. Digital/supply‑chain investments include the 437,000 sq ft Lichfield site (purchase £67.5m + ~£20m automation) adding ~80% more picking capacity and ~20% more online stock points with benefits from FY28, a target long‑term online penetration ~50% (pre‑incident 34%), stock cover ~15 weeks, availability in the high‑80s, group sales £17.4bn (+20% incl. Ocado; excl. Ocado £14.2bn +1.9%), adjusted PBT £671.4m (incl. £100m cyber insurance) and operating free cash inflow £131.3m; dividend to be grown over time.Marks and Spencer Financial Statement Overview
Summary
Income Statement
68
Positive
Balance Sheet
61
Positive
Cash Flow
58
Neutral
| Breakdown | Mar 2026 | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 17.27B | 13.82B | 13.04B | 11.93B | 10.89B |
| Gross Profit | 4.83B | 4.61B | 4.46B | 4.14B | 3.75B |
| EBITDA | 1.22B | 1.15B | 1.37B | 1.25B | 1.16B |
| Net Income | 259.40M | 295.70M | 431.20M | 363.40M | 306.60M |
Balance Sheet | |||||
| Total Assets | 10.11B | 8.82B | 8.68B | 9.10B | 9.44B |
| Cash, Cash Equivalents and Short-Term Investments | 1.01B | 1.15B | 1.03B | 1.08B | 1.22B |
| Total Debt | 3.42B | 2.94B | 3.13B | 3.63B | 3.81B |
| Total Liabilities | 6.89B | 5.87B | 5.85B | 6.28B | 6.53B |
| Stockholders Equity | 3.06B | 2.94B | 2.83B | 2.81B | 2.91B |
Cash Flow | |||||
| Free Cash Flow | 453.40M | 806.10M | 872.40M | 619.60M | 1.12B |
| Operating Cash Flow | 1.03B | 1.31B | 1.30B | 1.03B | 1.38B |
| Investing Cash Flow | -381.40M | -696.10M | -435.30M | -516.60M | -245.70M |
| Financing Cash Flow | -511.60M | -773.60M | -909.80M | -643.80M | -595.90M |
Marks and Spencer Technical Analysis
Positive
394.80
Price Trends
391.07
Positive
387.49
Positive
371.75
Positive
Market Momentum
6.93
Positive
57.41
Neutral
10.50
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:MKS, the sentiment is Positive. The current price of 394.8 is below the 20-day moving average (MA) of 407.36, above the 50-day MA of 391.07, and above the 200-day MA of 371.75, indicating a bullish trend. The MACD of 6.93 indicates Positive momentum. The RSI at 57.41 is Neutral, neither overbought nor oversold. The STOCH value of 10.50 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GB:MKS.
Marks and Spencer Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | £17.53B | 19.19 | 58.63% | 4.09% | 12.52% | 19.24% | |
78 Outperform | £1.75B | 11.26 | 99.65% | 8.13% | 3.08% | -0.16% | |
70 Outperform | £3.85B | 10.49 | 15.67% | 4.55% | 8.13% | 28.46% | |
66 Neutral | £4.33B | 8.04 | 18.67% | 1.38% | 2.06% | 14.07% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
57 Neutral | £8.52B | 33.47 | 8.86% | 1.02% | 25.02% | -13.12% | |
54 Neutral | £514.49M | -2.22 | -155.17% | ― | -15.00% | 21.71% |
* Consumer Cyclical Sector Average
GB:MKS
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4.79%
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Marks and Spencer Corporate Events
Business Operations and Strategy
Marks and Spencer Admits Additional Shares to LSE Under Employee Scheme
Neutral
Oct 1, 2026
Marks and Spencer Group plc has issued 48,125 new ordinary shares of 1p each, which have been admitted to trading on the London Stock Exchange’s Main Market and are fully fungible with the existing share capital. Following this small issuanc...
Regulatory Filings and Compliance
Marks and Spencer Confirms Total Voting Rights and Share Capital
Neutral
Oct 1, 2026
Marks and Spencer Group plc has disclosed that its issued share capital comprises 2,080,557,878 ordinary shares, all of which carry voting rights. The company confirmed it holds no shares in Treasury, meaning the full share count is currently in c...
Business Operations and StrategyRegulatory Filings and Compliance
Marks and Spencer Executives Add Shares via Incentive Plan
Positive
Sep 29, 2026
Marks and Spencer Group plc has disclosed that Operations Director S. Berendji and Managing Director, Food, A. Freudmann have each acquired additional Ordinary 1p shares through the company’s all-employee Share Incentive Plan. The transactio...
Regulatory Filings and Compliance
Marks and Spencer Updates Market on Total Voting Rights and Share Capital Structure
Neutral
Sep 1, 2026
Marks and Spencer Group plc has disclosed that its issued share capital comprises 2,080,509,753 ordinary shares carrying voting rights, and it currently holds no shares in Treasury. This updated share count will serve as the reference denominator ...
Business Operations and StrategyDelistings and Listing ChangesRegulatory Filings and Compliance
Marks and Spencer Admits New Shares Under Employee SAYE Scheme
Neutral
Sep 1, 2026
Marks and Spencer Group plc has issued and admitted to trading 285,136 new ordinary shares of 1p each on the London Stock Exchange’s Main Market, taking the total number of shares in issue to 2,080,509,753. The new shares, which are fully fu...
Regulatory Filings and Compliance
Marks and Spencer Executives Add Shares Through Employee Incentive Plan
Positive
Aug 28, 2026
Marks and Spencer has reported routine share dealings by senior executives under its all-employee Share Incentive Plan, underscoring continued internal participation in the retailer’s equity. Operations Director S. Berendji acquired 39 ordin...
Regulatory Filings and Compliance
Marks and Spencer Confirms Total Voting Rights and Share Capital Structure
Neutral
Aug 3, 2026
Marks and Spencer Group plc has confirmed that its issued share capital comprises 2,080,224,617 ordinary shares carrying voting rights, and it holds no shares in treasury at the time of disclosure. This update provides shareholders and market part...
Business Operations and StrategyRegulatory Filings and Compliance
Marks and Spencer Admits Over 13 Million New Shares for Employee Schemes
Neutral
Aug 3, 2026
Marks and Spencer Group plc has issued and admitted to trading 13,287,362 new ordinary shares of 1p each on the London Stock Exchange’s Main Market, bringing its total number of ordinary shares in issue to 2,080,224,617. The new shares, whic...
Executive/Board ChangesRegulatory Filings and Compliance
Marks and Spencer Executives Add Shares via Employee Incentive Plan
Positive
Jul 28, 2026
Marks and Spencer reported that senior executives increased their holdings in the company through its all-employee Share Incentive Plan. Operations Director S. Berendji and Food Managing Director A. Freudmann acquired small tranches of ordinary sh...
Regulatory Filings and Compliance
Marks and Spencer Discloses Share Sale by International Managing Director
Neutral
Jul 24, 2026
Marks and Spencer Group plc disclosed that M. Lemming, its Managing Director for International and a person discharging managerial responsibilities, sold 82,997 ordinary 1p shares in the company. The transaction, executed on 23 July 2026 on the Lo...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.