Fri, 7th November 2008

City view - Marks & Spencer

Bernstein Research has upgraded its recommendation on M&S to 'Outperform' and increased its target price from 230p to 300p.

The broker believes M&S is an early cyclical play and could benefit from the cut in UK interest rates as this might be the catalyst that prompts greater investor interest in UK discretionary retailers.

Although Bernstein acknowledges that there are risks from it being too early in recommending M&S it believes that the headwinds the company faces are surmountable. It suggests it has more ammunition to counter the tough markets than its competitors like Next. Its new target price of 300p compares with an underlying share price of 257p following the 3% jump in early trading today (November 7).