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November proved to be a tricky month for the Marks & Spencer (LSE:MKS) share worth. It was one of many worst-performing shares within the FTSE 100, falling virtually 14% within the month. Right here’s what precipitated the transfer and the place I believe it might go from right here.
Key components to notice
In April 2025, the enterprise was topic to a extreme cyber incident that compelled the corporate to halt on-line orders and disrupt its logistics techniques. The total affect of this wasn’t evident till the half-year outcomes got here out firstly of November. It confirmed that its underlying pre-tax revenue for the six months fell by 55% to £184.1m. A giant issue on this got here from the one-off hit from the cyber assault.
Despite the fact that buyers have identified in regards to the assault for months, it’s solely now turn out to be obvious what the complete extent of the harm is. Consequently, the share worth fell as sentiment soured following the outcomes.
Greater than this, CEO Stuart Machin mentioned restoration after the cyber-attack had slowed, saying inventory availability and common logistics weren’t again up to the mark as shortly as deliberate. That is regarding because it might imply that efficiency could possibly be impacted in future quarterly monetary updates. This readjustment in investor expectations was one other issue within the November fall.
Lastly, there was concern across the newest UK Finances. With extra individuals feeling a squeeze on their pay, Marks & Spencer might see decrease demand from the cost-of-living pressures. These might discourage discretionary spending and push prospects to cheaper options.
The route from right here
After I wrote in regards to the firm final month, I made two key factors about why I don’t suppose the corporate’s finest days are behind it. To start with, it seems attractively valued primarily based on its present price-to-earnings ratio. That is 10.97, effectively under the FTSE 100 common of 18.2. So I wrestle to see the share worth falling materially within the coming months, as worth hunters would possible step in.
The opposite issue is key progress. The corporate continues to be pushing forward with retailer expansions, renovations, and a push on the (already) strongly performing meals enterprise. It’s doing effectively within the technique choices for long-term success. So after we put the one-off hit from the cyber assault, there’s nonetheless a compelling cause to need to personal the inventory.
After all, nothing is for sure. I believe one danger is additional cyber assaults, together with common buyer issues about purchasing with the corporate and handing over their fee information.
The November decline means the inventory is down 9% over the previous 12 months. But after we zoom out a bit additional, it’s nonetheless up 180% within the final three years. So, on stability, I believe the transfer decrease in November represents potential shopping for alternative for consideration by buyers.
