Marks & Spencer shares (LON:MKS) are rallying 3% today following an upgrade to “Buy” from “Neutral” by Citi, signaling renewed confidence in the retailer's prospects. The upgrade suggests an attractive entry point for markets after a recent selloff, coupled with positive momentum within the business.
Citi's price target is set at 440 GBp, reflecting an anticipated upside based on the company's improving fundamentals. The upgrade follows a similar move by Jefferies back in May, which also assigned a “Buy” rating and a 440p price target, citing robust UK consumer fundamentals and expectations that a recent cyberattack would not significantly impede M&S's medium-term market share gains.
M&S shares are trading 9.48% lower YTD, as sentiment shifted following the significant cyberattack that occurred in April. The company successfully restored its click-and-collect services by August, a crucial step in mitigating the disruption caused by the attack, which had an estimated £300 million impact. The restoration of services has been well received, helping to stabilize investor sentiment.
Recent data indicates a 6.7% year-on-year increase in M&S's food sales over the 12 weeks leading up to August 9, underscoring the resilience of the company's food segment and its ability to bounce back from operational challenges.
In a move aimed at long-term growth, M&S announced a substantial £340 million investment in a fully automated distribution center in Daventry, slated to open in 2029. This investment is expected to double the size of its food business and significantly enhance operational efficiencies, positioning the company for future expansion.
Adding to the recent developments, Justin King, a non-executive director and former head of M&S's food division, resigned from the board, effective September 10, 2025. While the resignation introduces a change in leadership, the markets appear to be focused on the more immediate financial and operational improvements.
The upgrade from Citi is providing a boost to start the week, but can MKS turn the corner?
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