J.P. Morgan keeps M&S “overweight,” adds to Positive Catalyst Watch before H1

Investing.com -- Marks & Spencer Group Plc (LON:MKS) has been placed on J.P. Morgan’s Positive Catalyst Watch ahead of its first-half fiscal 2026 results, scheduled for Nov. 5, and a Capital Markets Day on Nov. 11. 

The brokerage reiterated an “overweight” rating on the stock, highlighting signs that the retailer has largely returned to normal operations following the April cyberattack that disrupted trading earlier this year.

According to J.P. Morgan, most of M&S’s systems have now been relaunched and the online business has reopened, bringing the group back to “business as usual.” 

The brokerage noted that recent Worldpanel and Nielsen Grocery data show engagement in the Food segment has remained strong, with M&S shopper numbers up about 12% year over year.

In the Fashion, Home & Beauty division, web and app traffic trends have returned to positive territory. 

The company has also run selected Sparks promotions and targeted marketing campaigns aimed at driving customer re-engagement. 

J.P. Morgan said the core reasons behind M&S’s consistent share gains in clothing prior to the cyberattack, such as improved style, stronger value, greater convenience, and limited competition in its core market, remain intact. 

The new clothing collection has received favorable coverage in the press for its appeal to both core and younger shoppers.

J.P. Morgan added that Next’s strong performance during the M&S cyber disruption highlighted the relative lack of scale competition in M&S’s market segment. 

The brokerage said that with the company’s operations stabilizing, the balance of risk has shifted to the upside.

The analysts stated that if M&S can reassure investors about customer engagement in Fashion, Home & Beauty during the key peak trading period, focus is likely to return to the broader turnaround story. 

J.P. Morgan sees continued opportunities for market share gains across both divisions, supported by operational efficiencies to fund growth investments and margin improvements.