Citi still sees 'strategic rationale' for Ocado Retail, raises target for M&S

Despite the difficult environment encountered during the year-long planning phase for its launch - which saw increased demand for Ocado - the broker argued that the strategic rationale for the partnership remained intact.

"[Ocado Retail] should allow a wider range of customers to reappraise the M&S offer in terms of breadth of range, relative price and quality in addition to delivering volume synergies," they said.

Citi analysts did lower their estimates for M&S's profits before tax in financial year 2021 from £241m to £166m, but raised that for FY 2022 by 7% to £331m, from £309m, on the back of the "significant" cost restructuring that was under way.

The analysts stuck to their 'neutral' recommendation for shares of M&S.