Berenberg raises target price on Marks & Spencer's following H1 results

Berenberg, which also reiterated its 'buy' rating on the stock, said Marks & Spencer's first-half results on 10 November had "smashed expectations", with the group delivering a "remarkable guidance upgrade" and providing further confidence that it will emerge from the coronavirus pandemic a stronger omnichannel business.

In clothing and home, Berenberg said it now has improved confidence in the group's medium-term margin outlook, while in the food division, it said value perception improvements and continued recovery of food-to-go should support market share progression.

"Cost inflation pressures will increase, but we believe self-help opportunities and synergy opportunities via the Ocado tie-up will mitigate these headwinds," said the German bank.

"As M&S delivers on its targets and de-levers its balance sheet, this will drive a further re-rating in our view."