July 1, 2019 / 1:46 PM / in 18 days

BUZZ-Marks & Spencer: Hard to make a strong positive case right now - RBC

** Shares of British clothing and food retailer were down as much as 2.1% at 206.1 pence

** RBC cuts PT to 225 pence from 250 pence

** Median PT on the 135-year-old mainstay of Britain’s shopping streets currently at 239.1 pence, according to Refinitiv data

** RBC says it reduces M&S’s EPS forecasts by 5% owing to lower-than-expected LFL sales for Clothing and Food for this year, and higher U.S. dollar sourcing costs for next year

** “Overall, we think it is hard to make a strong positive case for M&S right now,” analysts at RBC said in a note

** RBC: “It feels like any food volume recovery will be choppy, any clothing improvement will be H2 weighted this year, and there’s still a lot of investment and training to do on systems to improve food availability”

** M&S reported a third straight drop in annual profits in May as it closes weaker stores, revamps ranges and invests online, striving to avoid the fate of a string of UK chains that have collapsed amid competition from the internet and rising costs (Reporting by Justin George Varghese in Bengaluru)

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