Bank forecasts for M&S over Christmas and New Year are short on cheer
City fears that High Street favourite Marks & Spencer could be in for a tough Christmas and an even worse New Year are on the rise.
With strong signs of recovery in a retail sector which has been in the mire all year, outgoing chief executive Sir Stuart Rose was hoping for some strong final numbers before he hands over to Marc Bolland, the marketing guru poached from Morrisons.
But with retail experts already unsure of M&S's product offering and analysts getting jumpy about the share price, the signs are that Bolland's job could be even tougher than he realises.
Deutsche Bank says in a note to clients that the shares have rallied strongly this year and that profit forecasts have been lifted. But it adds: "M&S now needs to outperform its competitors, and there is little sign of this. Bolland has strong marketing credentials, which has been a weak point for M&S, but he arrives in February and changes take time."
Critics say the company suffers from its attempt to be all things to everyone, leaving it squeezed by the discounts shops on one hand and luxury players on the other.
This could mean the shares have run out of steam.
Bank of America has just removed the stock from its "Most Preferred" list, though reckons they are still worth buying.
Not all the City is down on M&S. Morgan Stanley has tipped it as preferred retailer for the festive season.
Analyst Geoff Ruddell said: "We think there is a good chance that M&S will deliver a better gross margin performance than its current guidance suggests."
