MARKET REPORT: Investors gobble up M&S as meals hits ‘candy spot’

Marks & Spencer shares reached their highest level in more than seven years after analysts said its food division hit a ‘sweet spot’.

The High Street stalwart rose 2.9 per cent, or 10.2p, to 361.4p, hitting a level not seen since June 2017, after analysts at RBC and Barclays both raised their target prices on the stock to 400p.

M&S won plaudits earlier this month after releasing a well-received autumn/winter fashion range. 

But latest research from City experts threw the spotlight on its food and drinks offering.

Marks & Spencer rose 2.9%, hitting a level not seen since June 2017, after analysts at RBC and Barclays both raised their target prices on the stock to 400p

Barclays noted that the retailer’s food business has grown its market share.

And for RBC analyst Richard Chamberlain, the division is in the ‘sweet spot’ and in a strong position to build its premium offering as rivals focus on keeping prices low.

‘The M&S share price has performed well year to date but we see further upside driven by food outperformance, clothing full price sales and M&S’s strong cash generation,’ he said.

The shares have gained nearly a third this year and have risen 62 per cent since it rejoined the blue-chip index almost a year ago.

It was a quieter day for the wider market yesterday, with the FTSE 100 inching up 0.06 per cent, or 5.35 points, to 8,278.44 and the FTSE 250 adding 0.2 per cent, or 34.22 points, to 20929.59

Another major FTSE player, BP, was in focus as a private equity firm invested in one of its businesses that owns a portion of the Trans Adriatic natural gas pipeline. 

Stock Watch – TT Electronics

Shares in TT Electronics crashed to a ten-year low as it issued a profit warning.

The engineer – whose customers include defence giant BAE Systems – expects group profits for 2024 to be in the range of £37million to £42million due to higher production costs and order delays in North America.

That would be less than the £54million to £56.8million range pencilled in by analysts. 

Shares tumbled 31.6 per cent, or 44.8p, to 97.2p, to the lowest level since 2014.

Apollo Global Management snapped up a non-controlling stake in the oil major’s company BP Pipelines TAP, which has a 20 per cent holding in the project.

BP also said it plans to sell its US onshore wind energy business. The energy giant’s shares edged up 0.5 per cent, or 1.95p, to 406.15p.

Elsewhere in the sector, energy firm Union Jack won planning approval to expand the development of its Wressle oilfield in North Lincolnshire. Shares rose 4.8 per cent, or 0.75p, to 16.25p.

Gambling software group Playtech landed a revised deal with Mexican gambling operator Caliente Interactive.

The agreement will see the London-listed firm take a 30.8 per cent stake in Cali Interactive, the new holding company of the joint business Caliplay, and receive an extra £106million over four years. 

In a separate update, Playtech said it expects annual profits to beat market forecasts due to a strong performance within its business-to-business division. Shares soared 15.1 per cent, or 99p, to 753p.

Video games developer Keywords reported a solid first half as revenues rose 7 per cent to £333million ($440million) in the six months to the end of June. 

The group expects its £2.1billion takeover by Swedish private equity firm EQT to be completed next month. Shares edged up 0.1 per cent, or 2p, to 2428p.

Fund manager JTC is to snap up a business owned by Citigroup for £61million ($80million). 

The company said the deal to buy Citi Trust, which should be completed by the first half of next year, will make the US its biggest market. Shares added 3.9 per cent, or 42p, to 1134p.