Marks and Spencer (GB:MKS)
LSE:MKS
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Marks and Spencer
(LSE:MKS)
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Rating:59Neutral
Price Target:
367.00 p
▼(-0.46% Downside)
Action:Reiterated
Date:05/22/26
The score is driven primarily by solid but weakening fundamentals: strong revenue momentum and ongoing profitability are offset by FY2026 margin and free-cash-flow deterioration and moderate leverage. Technicals are mixed (negative MACD and below long-term averages), valuation looks somewhat rich (higher P/E with low yield), while the earnings call adds modest support through Food strength and profit-growth guidance but highlights meaningful near-term execution and cost headwinds.
Positive Factors
Food business strength
Sustained food growth and market-share gains reflect durable competitive strength in grocery and prepared meals. The Ocado partnership scales omnichannel distribution, raises recurring volume, and provides more predictable cash flow and customer reach that should support margin resilience over the medium term.
Negative Factors
Margin compression
A sharp fall in net margin signals structural pressure from cost inflation, lower everyday food margins and mix shifts. Persistently lower margins erode the company's ability to self-fund capex, cushion shocks or rebuild returns, increasing reliance on execution to restore profitability.
Read all positive and negative factors
Positive Factors
Negative Factors
Food business strength
Sustained food growth and market-share gains reflect durable competitive strength in grocery and prepared meals. The Ocado partnership scales omnichannel distribution, raises recurring volume, and provides more predictable cash flow and customer reach that should support margin resilience over the medium term.
Read all positive factors
Marks and Spencer (MKS) vs. iShares MSCI United Kingdom ETF (EWC)
Market Cap
£7.06B
Dividend Yield1.18%
Average Volume (3M)6.70M
Price to Earnings (P/E)26.7
Beta (1Y)1.00
Revenue Growth25.02%
EPS Growth-14.15%
CountryUK
Employees64,000
SectorConsumer Cyclical
Sector Strength84
IndustryDepartment Stores
Share Statistics
EPS (TTM)0.12
Shares Outstanding2,066,152,600
10 Day Avg. Volume6,777,397
30 Day Avg. Volume6,695,167
Financial Highlights & Ratios
PEG Ratio-2.00
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
£424.89Price Target Upside15.24% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering9
EPS Forecast (FY)0.33
Revenue Forecast (FY)£18.76B
Marks and Spencer Business Overview & Revenue Model
Company Description
Marks and Spencer Group plc operates various retail stores. It operates through five segments: UK Clothing & Home, UK Food, International, Ocado, and All Other. The company offers protein deli and dairy; produce; ambient and in-store bakery; meals...
How the Company Makes Money
M&S makes money mainly by selling goods to consumers through a multi-channel retail model, generating revenue when customers purchase products in-store or online. Its key revenue streams include: (1) Clothing & Home retail sales: income from selli...
Marks and Spencer Earnings Call Summary
Earnings Call Date:May 20, 2026
(Q4-2026)
| % Change Since: |
Next Earnings Date:Nov 11, 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 | 0.00 | 4.61B | 4.46B | 4.14B | 3.75B |
| EBITDA | 1.19B | 1.49B | 1.37B | 1.20B | 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
368.70
Price Trends
342.28
Positive
355.94
Negative
356.01
Negative
Market Momentum
-3.07
Negative
58.47
Neutral
87.57
Negative
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 368.7 is above the 20-day moving average (MA) of 329.81, above the 50-day MA of 342.28, and above the 200-day MA of 356.01, indicating a neutral trend. The MACD of -3.07 indicates Negative momentum. The RSI at 58.47 is Neutral, neither overbought nor oversold. The STOCH value of 87.57 is Negative, 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 |
|---|---|---|---|---|---|---|---|
73 Outperform | £3.06B | 2.38 | 21.64% | ― | -6.43% | 52.93% | |
70 Outperform | £14.82B | 7.98 | 52.86% | 1.80% | 12.80% | 23.60% | |
68 Neutral | £3.67B | 9.49 | 15.14% | 1.21% | 10.51% | -9.26% | |
65 Neutral | £1.55B | 6.72 | 105.88% | 3.99% | 4.39% | -1.37% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
59 Neutral | £7.06B | 26.69 | 0.69% | 1.18% | 25.02% | -14.15% | |
54 Neutral | £279.98M | -0.65 | -155.17% | ― | -15.00% | 21.71% |
* Consumer Cyclical Sector Average
GB:MKS
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Marks and Spencer Corporate Events
Business Operations and StrategyExecutive/Board Changes
Marks and Spencer Board Member Cheryl Potter to Step Down
Neutral
May 20, 2026
Marks and Spencer Group plc has announced that Non-Executive Director Cheryl Potter will step down from its board effective 7 July 2026 and will not stand for re-election at the upcoming annual general meeting. Potter, who joined the board in Marc...
DividendsFinancial DisclosuresRegulatory Filings and Compliance
Marks and Spencer unveils 2026 prelims and proposes higher full-year dividend
Positive
May 20, 2026
Marks and Spencer Group plc has published its preliminary results for the 52 weeks to 28 March 2026, making the full report available via the London Stock Exchange and the company’s corporate website for investors and stakeholders. The discl...
Regulatory Filings and Compliance
Marks and Spencer Updates Share Capital After SAYE Scheme Allotment
Neutral
May 1, 2026
Marks and Spencer Group has issued and allotted 643,985 new ordinary shares of 1p each under its Save As You Earn (SAYE) employee share scheme, with the shares issued on various dates during April 2026. These shares were already covered by a prior...
Regulatory Filings and Compliance
Marks and Spencer Executives Increase Holdings Through Share Incentive Plan
Positive
Apr 28, 2026
Marks and Spencer Group plc has reported share purchases by senior executives under its all-employee Share Incentive Plan, signalling continued alignment between management and shareholder interests. Operations Director S. Berendji and Managing Di...
Business Operations and StrategyRegulatory Filings and Compliance
Marks and Spencer Updates Share Capital After SAYE Share Issuance
Neutral
Apr 1, 2026
Marks and Spencer Group has issued and allotted 861,019 new ordinary shares of 1p each under its Save As You Earn employee share scheme, with the shares drawn from an existing block admission on the London Stock Exchange. Following this issuance, ...
Business Operations and StrategyRegulatory Filings and Compliance
Marks and Spencer Executives Add Shares Under Employee Incentive Plan
Positive
Mar 30, 2026
Marks and Spencer Group plc has disclosed small share purchases by two senior executives under its all-employee Share Incentive Plan, in line with UK market abuse regulations. Operations Director S. Berendji and Managing Director of Food A. Freudm...
Executive/Board ChangesRegulatory Filings and Compliance
Marks and Spencer CFO Dolan Sells Shares After Award Vesting
Neutral
Mar 24, 2026
Marks and Spencer disclosed a director share transaction involving Chief Financial Officer Alison Dolan, following the vesting of an award under the company’s Restricted Share Plan that was granted to compensate for incentives forfeited on l...
Business Operations and StrategyRegulatory Filings and Compliance
Marks and Spencer Executives Add Shares Through Employee Incentive Plan
Positive
Mar 2, 2026
Marks and Spencer has disclosed that two senior executives acquired small additional holdings in the company through its all-employee Share Incentive Plan. Operations Director S. Berendji and Managing Director of Food A. Freudmann each bought 38 o...
Business Operations and StrategyRegulatory Filings and Compliance
Marks and Spencer Updates Share Capital After SAYE Scheme Issuance
Neutral
Mar 2, 2026
Marks and Spencer Group has issued and allotted 7,507,025 new ordinary shares of 1p each under its Save As You Earn (SAYE) employee share scheme, with the shares admitted to trading on the London Stock Exchange’s Main Market under an existin...
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.