Marks & Spencer Shares ‘Detached’ From Peers, Says Shore Capital

Marks & Spencer (LON: MKS) shares appear “detached in valuation terms from its peers,” according to Shore Capital, 

The firm’s note follows a pre-Christmas check-in with the retailer’s management. Marks & Spencer is a House Stock at Shore Capital.

Analyst Clive Black noted that the conversation was high-level, with M&S declining to discuss current trading or guidance ahead of the crucial Christmas period. 

The broker added that if any change to expectations were needed, M&S “would make a formal statement,” and consensus remains unchanged ahead of the retailer’s next update on 8 January 2026.

The firm continues to forecast FY26 profit before tax of £655 million and FY27 profit of £960 million. 

It highlighted that the shares trade on just 9.5 times FY27 earnings,  “a lowly PER” versus sector peers,  and sit on muted EV/sales and EV/EBITDA multiples. 

Black argued that if M&S delivers on FY27 expectations, there is “scope for a material re-rating” of the shares over time.

In food, M&S remains one of the fastest-growing UK grocers, with NIQ data showing 9.2 percent sales growth in the 12 weeks to 29 November. Ocado Retail, one-third owned through M&S product sales, is still the strongest-growing grocer at 14 percent.

However, fashion continues to face headwinds, according to Shore Capital. 

The firm stated that a mild autumn, stock overhangs from the first half, and what Black described as “idiotic timing” of the Budget have weighed on UK apparel spending. 

Promotional activity remains elevated across the sector, though Shore Capital noted M&S is managing stock “patiently, considered and rationally.”

With Christmas trading now decisive, Shore Capital said M&S has “all to play for,” arguing that its valuation discount to names such as Next and Tesco makes the stock a “real value play” if it can reaffirm consensus in January.