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Marks & Spencer Group PLC MKS

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Stock XLON Rating as of
GBX378.70 +1.10 (0.29%)
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Marks & Spencer Should Continue to Take UK Grocery Share

Verushka Shetty

In a fiercely competitive UK marketplace, Marks & Spencer underperformed for the better part of a decade, highlighting the difficulty in developing competitive advantages in the apparel and grocery sectors. The 200-year-old firm is exposed to disruption from new players such as price-led discounters and online retailers. In 2016, a fresh transformational plan was implemented. Although slow initially, postpandemic progress has been material, with new management at the helm in 2022.

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Price vs Fair Value

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MKS is trading at a LOCK|^?KWr#b premium.
Price
GBX378.70
Fair Value
!Pv
Uncertainty
LOCK|SStBR
1-Star Price
LOCK|D.h#S
5-Star Price
LOCK|X.bS
Economic Moat
LOCK|%LS
Capital Allocation
LOCK|QN$@$%

Bulls Say, Bears Say

Bulls

Its joint venture with Ocado should enable M&S to expand its online presence.

Bears

The execution of the transformational program has only recently begun to bear fruit, and lasting success could be challenged by the fiercely competitive underlying clothing and food markets.

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Trading Information

Previous Close Price
GBX377.60
Day Range
GBX377.40–384.00
52-Week Range
GBX301.10–418.33
Bid/Ask
GBX370.00 / GBX400.00
Shares Outstanding
2.07B
Market Cap
GBX783.53B
Volume/Avg
5M / 8M

Key Statistics

Price/Earnings (Normalized)
24.53
Price/Sales
0.46
Dividend Yield (Trailing)
1.11%
Dividend Yield (Forward)
1.11%
Dividend Payment Schedule
Jan, Jul
Total Yield
1.38%

Company Profile

Marks & Spencer is a British multichannel retailer with stores across Europe, Asia, and the Middle East. The majority of revenue stems from the firm’s UK operations, selling its own-brand food, clothing, and home merchandise predominantly. The food segment includes value products (dairy, poultry, meat, fresh produce), ready-made meals, and healthy items. The clothing and home division sells women's wear, lingerie, men's wear, kids' wear, beauty, and home products. The remaining revenue comes from international sales, where M&S sells through a mix of its own stores, franchises, and online channels.In 2020, the firm entered into a joint venture, purchasing 50% of grocery e-commerce business Ocado Retail. Ocado is the exclusive online distributor of M&S food within the UK.
Sector
Consumer Cyclical
Industry
Department Stores
Stock Style Box
Mid Core
Total Number of Employees
64,442
Website
https://www.marksandspencer.com

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Valuation

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Metric
MKS
ABF
SBRY
Price/Earnings (Normalized)
 24.5311.9714.89
Price/Book Value
 2.541.131.18
Price/Sales
 0.460.670.22
Price/Cash Flow
 7.026.094.17
Price/Earnings
MKS
ABF
SBRY

Financial Strength

Metric
MKS
ABF
SBRY
Quick Ratio
 0.470.630.22
Current Ratio
 0.861.510.56
Interest Coverage
 2.645.372.68
Quick Ratio
MKS
ABF
SBRY

Profitability

Metric
MKS
ABF
SBRY
Return on Assets (Normalized)
 5.03%6.02%—
Return on Equity (Normalized)
 16.83%10.35%—
Return on Invested Capital (Normalized)
 9.32%7.85%—
Return on Assets
MKS
ABF
SBRY

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Economic Moat
Market Cap
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—LOCK|&$$10B
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LOCK|!jLS<xLOCK|n?$$6B
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LOCK|s>ZjVnLOCK|rn$2B

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