Analyst at Berenberg raised their target price on retailer Marks & Spencer’s from 215.0p to 265.0p on Tuesday after the group’s “ReMarksable” interim results.
Berenberg, which also reiterated its ‘buy’ rating on the stock, said Marks & Spencer’s first-half results on 10 November had “smashed expectations”, with the group delivering a “remarkable guidance upgrade” and providing further confidence that it will emerge from the coronavirus pandemic a stronger omnichannel business.
In clothing and home, Berenberg said it now has improved confidence in the group’s medium-term margin outlook, while in the food division, it said value perception improvements and continued recovery of food-to-go should support market share progression.
“Cost inflation pressures will increase, but we believe self-help opportunities and synergy opportunities via the Ocado tie-up will mitigate these headwinds,” said the German bank.
“As M&S delivers on its targets and de-levers its balance sheet, this will drive a further re-rating in our view.”
Liberum initiated coverage of online ticket sales platform Trainline on Tuesday with a ‘buy’ rating and 400.0p price target.
The broker started out by stating that Trainline was well positioned to benefit from the continued shift of ticket sales online, thus capturing incremental market share.
Liberum said Covid-19 had been an accelerant for many online businesses as consumers fundamentally shifted habits online permanently and while train ticket purchasing was not the most obvious benefactor, early data suggested that online penetration had indeed increased since the emergence from the enforced Covid-19 lockdown.
“Management highlighted that RDG data suggests that online penetration has increased to 50% versus circa 40% pre-Covid. This shift is expected to continue and, as online market share increases, the total addressable market for Trainline will increase,” Liberum said.
Liberum also said the risk from GBR’s app was not as extreme as the market expects, given the consumer offering wins in the realm of online platforms.
“There are risks associated with the equity story. Trainline’s TPS revenues are at risk over the medium term and there is uncertainty around the current commission structure in the UK. On balance, we believe the risk/reward equation is favourable and, with the shares trading on 5.7x CY22 EV/Sales and a circa 40% discount to its average since IPO, we initiate on a buy.”
