- Marks Electrical Group
- 09 January 2026 10:12:38
Source: Sharecast
The bank said share price weakness in November and December has brought the forward price-to-earnings valuation (to March 2027E) down to a "relatively attractive" 10x.
"At the same time, we expect a sales recovery in the Fashion, Beauty & Home division next year (FY 2027E, to March 2027) following the cyberattack disruption that the company suffered in 2025, while the underlying trajectory in Food sales remains strong," it said.
Berenberg estimated that M&S will achieve free cash flow of more than £400m from FY 2027E and said that this could underpin an improvement in the dividend to a yield in the 3-4% range.
It said the retailer’s ongoing focus on product appeal through value-for-money pricing, quality and style could drive continued like-for-like sales growth and market share gains.
"The pace of food innovation shows no sign of slowing down, with the launch of new ranges, such as nutrient-dense food aimed at those taking GLP-1 medications, products aimed at gut health and reformulations designed to appeal to customers avoiding ultraprocessed foods," it said.
"Increasing GLP-1 medication use could also benefit M&S as a mid-market clothing retailer, as consumers seek reasonably priced clothing in smaller sizes, as we discussed in our recent Apparel Price Survey and market themes report. In addition, International and Ocado sales trends seem to be heading in the right direction, in our view."
At 0950 GMT, the shares were up 2% at 351.57p.