ShrutiAggarwal
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Relating to MKS.L

Posted by ShrutiAggarwal on 10 September 2018, 2:09 PM

Marks and spenser, an avoid at current levels

Topics: Analysis
Other Insights on Related Shares: MKS.L

Marks and Spenser is an avoid at the current levels as the valuation also shows that the company is fairly priced at the current level. The stock finished trading on the London stock exchange at 291p on 10th September, down by 0.78% compared to the last close. The stock has been trading below 20 DMA (Day moving average), 50 DMA and 100 DMA of 299p, 305p and 292p respectively. Trading below the short term moving averages generally doesn’t go well with the bulls! In terms of technical analysis or charting also, the stock is forming head and shoulders pattern and in case the stocks goes below 290p, it may see a retest of lows of 260-270. Therefore traders or investors shall avoid initiating any long in the company till we see any signs of consolidation or up move. The immediate support and resistance lies at 288p and 299p respectively. Traders or investors would be advised to keep an eye at the respective levels and accordingly hedge the positions.

As per the company’s FY’18 results, the company reported a flat growth in revenue of 0.7% year on year.  The retail giant’s profit before tax and after adjusting the non-recurring items was down by 5.4% year on year because of the decrease in food gross margin. Nonrecurring items of £514.1m included £321.1m for company’s UK store estate closure programme.  As per the management guidance, cash costs of transformation remain in line with plan. However, the good news for the investors is that the company’s net debt has reduced significantly by £107.2m. (Read more)

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Topics: Analysis
Other Insights on Related Shares: MKS.L

Marks and Spenser is an avoid at the current levels as the stock has been falling continuously for the last many months. The company announced its half yearly results a few days back on 8th November. However, post the results also the stock has continued its southward journey. The stock finished trading on the London Stock exchange at 302p a share on 18th November, up by 0.36% compared to the previous close.  In terms of charting or technical analysis, the stock has formed a rounding top pattern, which further confirms the bearish movement of the stock. It had also breeched the support levels of 310 and has tested the lows of 300p. However, any fall or closing below 300p can take the stock to 250p as well. Therefore, we would advise traders or investors to stay away from marks and Spenser, unless the stock starts consolidating and has bottomed out. The immediate support and resistance for the stock is at 300p and 330p respectively.

Let’s throw some light on the latest half yearly results of the company. The company’s revenue was up by 2.5% year on year. Profit before tax and adjusted items and adjusted earnings per share were down by 5.3% and 7% year on year respectively. Net debt also came down by 9% to £2.03bn versus £2.24bn in H1’16. (Read more)

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Topics: Analysis
Other Insights on Related Shares: MKS.L

Marks and Spencer group plc. is a ‘Hold’ at the current level as the stock still has a lot of scope of upside. The stock finished trading on the London Stock exchange at 382.5 p a share on 31st May, down by 1.14% compared to its previous close. The company announced its financial year 2017 results on 24th May. However, post the announcement of the results,  the stock has been seen in a correction mode. However, investors or traders shall wait for the stock to consolidate at its support levels and can even initiate fresh buying from the respective support zone. As per the charting or technical analysis, the medium term or long term trend of the stock looks bullish only as the stock has been firmly trading on the upward trend line and has also been making higher highs and lower lows.  Currently, the retail giant has been trading above its 20 day moving average (DMA), 50 DMA and 100 DMA of 380p, 359p and 347p respectively.  The immediate support for the stock is at 380p and 370p respectively. If the stock would be done with its correction or consolidation around 377p-380p, then investors or traders can initiate fresh buying and could hold the stock for the higher targets. The resistance for the stock is at 395p. Therefore, traders or investors shall keep a close eye at the respectively levels and accordingly initiate fresh positions in the stock.

Now let’s throw light on the financial year 2017 results of the company. The company’s  fiscal 2017 revenue grew  by 0.6% year on year to £10,622.0m versus  £10,555.4m in FY’16. However, the company reported adjusted profit before tax was down by 10.3%, year on year in FY’17. The profit before tax decreased because of the expected decrease in clothing and home sales and increased costs of new space. Revenue from clothing  and home was down by 2.8% due to planned reduction in promotion and clearance sales. However, food revenue grew by 4.2% because of new stores. The good news for the investors is that the net debt reduced by £204m because of strong cash generation. (Read more)

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Marks and Spenser group plc is a ‘Hold’ at the current price levels. The company announced its half yearly results on 10th November 2016.

The CEO Mr. Steve Row, commented on the results, “In May, we laid out a number of questions which we would answer as part of our strategic review.  We committed to creating a simpler business with customers at its heart, and taking action to start to recover our Clothing & Home business and continue to grow in Food. Our aim is to build a sustainable business which will delight our customers, provide a robust foundation for future growth and deliver value for our shareholders in the long term. We have made good progress on our plans and customers are already noticing a difference, particularly in Clothing & Home. In addition, we have made major steps towards fairer pay and pension arrangements, streamlined our senior management team and our plans to implement a simpler Head Office structure are well underway. We have now completed a forensic review of our estate both in the UK and in our International markets.  Over the next five years we will transform our UK estate with c.60 fewer Clothing & Home stores, whilst continuing to increase the number of our Simply Food stores. In the future, we will have more inspiring stores in places where customers want to shop that complement our growing digital offer. Internationally, we propose to cease trading in ten loss making owned markets, but intend to continue to develop our presence through our strong franchise partners. These are tough decisions, but vital to building a future M&S that is simpler, more relevant, multi-channel and focused on delivering sustainable returns.” (Read more)

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Topics: Analysis
Other Insights on Related Shares: MKS.L

Marks and Spenser announced its fiscal 2016 results on 25th May and the stock crashed by nearly 10% intraday, post the announcement of the results. The investor sentiments surely got dampened post the retail giant announced its yearly financial results. This might be because, M&S new boss, Steve Rowe warned that profits might take a hit in short term under a turnaround plan to slash clothing prices and put more staff in stores. Mr. Rowe also admitted that there is no instant solution to revive its beleaguered clothing arm. However, Mr. Rowe also said that he would cut everyday prices for almost one third of its clothing ranges, while reducing promotion and clearance sales. M &S has been trading below its 20 DMA, 50 DMA and 100 DMA of 424p, 423p and 422p respectively. The stock finished trading on London stock exchange at 392 p on Thursday, 26th May. However, the stock may start consolidating at 392 p as the stock has taken support at 392 p in the past and has bounced back from those levels. In case, the retail giant couldn’t sustain even at 392p, it might head for a new 52 week low. Based on earnings estimates for the company's fiscal year ending in march 2018, the stock has a price-to-earnings ratio of 19.5 which is quite high compared to FTSE100 12 month forward P/E of 13.37. The analysis of forward price to earnings of M&S also indicates that the stock is pretty overvalued.

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Posted by ShrutiAggarwal on 27 January 2016, 7:41 AM

M & S , Challenging trading conditions

Other Insights on Related Shares: MKS.L

Marks and spencer (M&S) is one of the leading UK’s retailors with over 1330 stores worldwide. The Company has over 798 stores across the United Kingdom in high streets and retail parks, as well as stations, airports and other locations ranging from out-of-town and flagship stores of over 100,000 square feet to Simply Food stores of around 7,000 square feet. The Company has over 455 international stores in 54 territories across Europe. M&S is a ‘Hold’ with a potential upside of up to 20% from the current levels.  According to the data from yahoo finance, the stock has a forward P/E of 15.96 compared to FTSE100 forward P/E of 13.37. The stock has a trailing P/E of 13.87. It finished trading on London stock exchange on Monday 25th January at 420 pence a share. However as per the analysis of stock’s forward P/E compared to FTSE 100 P/E, the stock seems slightly overpriced, that’s why we don’t see much upside in M& S from the current price levels.

M&S has mainly 2 divisions i.e. Food and general merchandise. 57% of the revenue attributes to the food division and rest of the revenue comes from general merchandise. Currently, the stock has been trading below 20 days and 50 day moving average of 432.7 pence and 467.7 pence respectively. However, the stock prices have stumbled a lot post November and they have come down from 540 pence to 410 pence lately. But, now it seems that stock prices have started consolidating at the current levels and we see the prices range bound between 420 p – 450 p in the near future. The stock would face resistance at 440 pence and the next resistance is seen at 457 pence. However, the stock seems to have very strong support at 410 pence and in case of stock breakdown below 410 pence, it will be an alarming signal for the bulls and they need to hedge their positions or trade with a strict stop loss. M&S has a consensus rating of ‘Hold’ and an average target price of 534 pence. However, our target price is slightly below the consensus target price which would be discussed in the later part of the article. (Read more)

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