Bernstein Keeps Marks & Spencer at Outperform Amid Expectations of Sustained High Food Margin

07:44 AM EDT, 09/03/2026 (MT Newswires) -- Bernstein reaffirmed its outperform rating on Marks & Spencer Group (MKS.L), noting that the British retailer is capable of continuing its growth while also sustaining high margins at its food segment. "We find that M&S has adopted a strategy of near-matching standard prices, while continuing to stretch the top of the range upwards. The approach varies by mission and category - suggesting that higher prices are more sustainable in M&S's strongest categories, and perhaps that further price investment is likely in others," analysts said Wednesday. "M&S standard prices are more price competitive on basics (e.g. Bakery, Dairy, Meat), and less competitive in areas of traditional M&S strength (e.g. Meals, Convenience). This fits with M&S's campaign to grow share in the 'Spine of the Basket', and suggests that it does not need to compete on price where its quality perception is strongest. However, some categories, such as Frozen and HPC, are less strong for M&S and may require price investment or range extension." The research firm expects the operating margin at the group's food business to recover to 5.4% in fiscal 2027 and remain at that level until fiscal 2031. In terms of total sales, the group is projected to see growth in fiscal years 2027 through 2031. The stock's price target stands at 4.40 pounds sterling.