Broker upgrades M&S shares for food-only expansion plans

Marks & Spencer, the prominent UK retailer, has enjoyed substantial growth in its shares, primarily attributable to its strategic expansion of food-only stores. Broker Peel Hunt has upgraded its expectations for M&S's stock, reflecting analysts’ confidence in the retailer’s ambitious plans to increase this segment of their business. The company, under the leadership of CEO Stuart Machin, has invested in larger food halls and introduced new products, which has contributed to attracting more customers during challenging economic conditions. Since the start of 2024, M&S shares have surged nearly 40%, with an impressive 75% increase over the last year. This growth trend has prompted analysts at Peel Hunt to raise their share price target from 360p to 425p, indicating a strong belief in M&S’s continued success. Similarly, UBS analysts have set an even higher target of 435p for M&S shares, the highest valuation since December 2015. As part of its expansion strategy, M&S opened four new food-only stores in the first half of the financial year and plans to add five more in the second half and ten in the following year. This oves demonstrates the company's commitment to maximizing its food business's potential, even as consumer confidence begins to recover. With interim results set for November 6, 2024, market observers are eager to assess M&S’s operational performance. The expectations for an upgrade in the trading outlook will likely benefit from recent positive sales data, underscoring the successful management strategies of Machin and the upcoming growth initiatives of M&S.