8th July 2013
UK retailing giant Marks & Spencer and luxury fashion label Burberry are among those updating the market this week. Mindful Money looks at whether investors should buy or sell writes Philip Scott.
Marks & Spencer delivers its first quarter trading update on Tuesday. Once again, same store UK general merchandise sales, including the highly observed women’s wear sector, are expected to decline, hindered by both unseasonal weather and an on-going loss of market share but same store UK food sales are again forecast to rise.
Online sales, albeit from a still relatively low base, are likely to have expanded further. Investors may continue to look forward, with the group’s new autumn clothing range, underwritten by new management signings, potentially pushing sales growth back into positive territory. Over the past year, its stock is now up by 47 per cent – and by 23 per cent in the past three months.
Keith Bowman, equities analyst at Hargreaves Lansdown Stockbrokers says: “For now, despite a previously announced reduction in capital expenditure, a new ecommerce distribution centre and hopes for its autumn clothing range, with only lower margin same store UK food sales growing, analyst opinion remains neutral in tone, as a ‘hold’.” But broker Panmure Gordon, is predicting better trading going forward, and The Share Centre rates the stock as a ‘buy’.”
FTSE 250 listed inter-dealer broker ICAP, has endured a volatile period but overall its stock is up, by 33 per cent in the past six months alone. In May, its results bolstered investor confidence. On Wednesday, the group updates the market with its interim management statement. Sheridan Admans, investment research manager at The Share Centre says: “Investors will be keen to know how the recent falls in global markets have affected trading activity. The company will be expected to comment on new initiatives and its on-going cost cutting measures. It may also throw further light on the Libor scandal.” Admans lists the stock as a ‘hold’.
Bowman adds: “New regulation for banks, the group’s main customers, can stifle confidence but the market knows this and would have priced this in. Icap has also been cutting costs and the market will look forward to an update. For the moment, analyst consensus has it rated as a ‘hold’.”