Stock Analysis

Why Marks and Spencer Group plc (LON:MKS) Could Be Worth Watching

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LSE:MKS
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Marks and Spencer Group plc (LON:MKS), might not be a large cap stock, but it received a lot of attention from a substantial price movement on the LSE over the last few months, increasing to UK£1.52 at one point, and dropping to the lows of UK£1.30. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Marks and Spencer Group's current trading price of UK£1.36 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Marks and Spencer Group’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

View our latest analysis for Marks and Spencer Group

What Is Marks and Spencer Group Worth?

Good news, investors! Marks and Spencer Group is still a bargain right now. According to my valuation, the intrinsic value for the stock is £2.10, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. However, given that Marks and Spencer Group’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.

Can we expect growth from Marks and Spencer Group?

earnings-and-revenue-growth
LSE:MKS Earnings and Revenue Growth August 8th 2022

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. Though in the case of Marks and Spencer Group, it is expected to deliver a relatively unexciting earnings growth of 8.5%, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for the company, at least in the near term.

What This Means For You

Are you a shareholder? Even though growth is relatively muted, since MKS is currently undervalued, it may be a great time to increase your holdings in the stock. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on MKS for a while, now might be the time to enter the stock. Its future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy MKS. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed investment decision.

So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. While conducting our analysis, we found that Marks and Spencer Group has 1 warning sign and it would be unwise to ignore it.

If you are no longer interested in Marks and Spencer Group, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

Valuation is complex, but we're helping make it simple.

Find out whether Marks and Spencer Group is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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About LSE:MKS

Marks and Spencer Group

Marks and Spencer Group plc operates various retail stores.

The Snowflake is a visual investment summary with the score of each axis being calculated by 6 checks in 5 areas.

Analysis AreaScore (0-6)
Valuation4
Future Growth1
Past Performance5
Financial Health4
Dividends0

Read more about these checks in the individual report sections or in our analysis model.

Solid track record and good value.