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

Marks and Spencer Group plc (LON:MKS), might not be a large cap stock, but it saw a decent share price growth of 17% on the LSE over the last few months. The company is inching closer to its yearly highs following the recent share price climb. As a mid-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, could the stock still be trading at a relatively cheap price? Let’s take a look at Marks and Spencer Group’s outlook and value based on the most recent financial data to see if the opportunity still exists.

Check out our latest analysis for Marks and Spencer Group

Is Marks and Spencer Group Still Cheap?

Great news for investors – Marks and Spencer Group is still trading at a fairly cheap price. Our valuation model shows that the intrinsic value for the stock is £4.60, but it is currently trading at UK£2.89 on the share market, meaning that there is still an opportunity to buy now. Although, there may be another chance to buy again in the future. This is because Marks and Spencer Group’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company's shares will likely fall by more than the rest of the market, providing a prime buying opportunity.

What kind of growth will Marks and Spencer Group generate?

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. 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. Marks and Spencer Group's earnings over the next few years are expected to increase by 37%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? Since MKS is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With a positive outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as financial health 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 prosperous 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 strength of its balance sheet, in order to make a well-informed investment decision.

If you'd like to know more about Marks and Spencer Group as a business, it's important to be aware of any risks it's facing. Case in point: We've spotted 1 warning sign for Marks and Spencer Group you should be aware of.

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.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com