- Marks & Spencer Group
- 21 July 2026 14:54:30
Source: Sharecast
The bank said M&S has a clear, quantifiable opportunity to close a meaningful portion of its online margin gap in Fashion, Home & Beauty (FH&B) as the Lichfield distribution centre ramps.
JPM said it had identified three tangible building blocks to around 400 basis points of FH&B online margin upside, leading it to lifts its FY29 group pre-tax profit forecast by 6%.
"This leaves us low single digit percentage ahead of Bloomberg consensus on group profit before tax, and 6%/ 5% higher on FH&B/ Food EBIT," the bank said. "We do not view this as the maximum margin improvement available, nor the only opportunity in the business - but we are comfortable embedding this upside given the tangible building blocks laid out in detail in this note.
"Indeed, our bull case scenario, also incorporating better order economics and sourcing benefits, would drive a further 7% upside to our PBT forecast, and would leave us double digit percentage ahead of consensus."
JPM also said the valuation remains undemanding, noting that M&S trades on 10.7x CY27 price-to-earnings, which is around 7% below its five-year pre-pandemic average, despite materially better turnaround visibility.
"We raise our Mar-28 multiples-based TP to 450p (from 440p), applying a circa 13x multiple (a 10% premium to the pre-pandemic average) to reflect our view that the turnaround is regaining traction," it said.
At 1452 BST, M&S shares were up 3.5% at 393.10p.