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Investing.com - RBC Capital downgraded Marks and Spencer Group Plc. (LON:MKS) (OTC:MAKSY) from Outperform to Sector Perform on Monday while raising its price target to GBP4.00 from GBP3.75.
The downgrade comes despite RBC slightly raising its earnings per share forecasts for the British retailer, citing a likely strong end to the first half for premium food and clothing segments.
RBC noted that M&S benefited once it restored its clothing business online and following a shift to autumnal weather that boosted seasonal sales.
The investment firm’s decision to lower the rating follows a strong recent recovery in M&S shares, which now trade at 13 times calendar year 2026 estimated price-to-earnings ratio.
RBC considers this valuation fair compared to competitors Sainsbury’s at 13.5x, Tesco at 14.5x, and Next at 16.5x, with the analyst noting that Next has a stronger online setup and better international online growth prospects.
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