Marks & Spencer Share Rating Lifted to Buy as Cyber Attack Provokes ‘More Normalised Positioning’

Jefferies raised its rating for Marks & Spencer (LON: MKS) to Buy from Hold in a note to clients this week.

The firm told investors that the recent cyberattack has led to a “more normalised positioning” of the stock, creating a buying opportunity.

The broker raised its price target on the retailer to 440p from 370p, implying a potential significant upside from current levels. 

Jefferies explained its earlier downgrade in February was driven by concerns that market profit expectations for 2025–26 were too far ahead of what M&S would likely commit to.

“We think the cyberattack has provoked much more normalised positioning in the stock,” the analyst wrote, noting that the price-to-earnings premium relative to Tesco and Sainsbury’s had swung from 14% in April to a 9% discount now. 

Against a broader group of European consumer discretionary stocks, M&S is said to trade at an even steeper discount of -17% to -32%.

Jefferies said its new price target implies a 16.1x P/E for 2025–26, falling to 12.3x the following year, both within the typical 9x to 13x range for UK retailers, though towards the higher end given M&S’s potential to gain market share.

The stock was recently pressured following the cyber attack. Marks & Spencer said in its earnings release on Wednesday that it would continue to affect operations into July.

The cyber incident is expected to hit full-year group operating profit by around £300 million before mitigation.

Marks & Spencer shares gained almost 2% in Wednesday's session and are up a further 1.8% in early Thursday trading, above the 381p mark.