MARKET REPORT: Investors devour M&S as food hits ‘sweet spot’

Shares in Marks & Spencer hit their highest level in more than seven years after analysts said the food division had hit a “sweet spot”.

The High Street’s fixed value of shares rose 2.9 per cent, or 10.2p, to 361.4p, reaching levels not seen since June 2017 after analysts at RBC and Barclays raised their price targets on the stock to 400p.

M&S received widespread praise earlier this month after launching a well-received autumn/winter collection.

But recent research by city experts has highlighted the food and drink offerings.

Barclays noted that the supermarket chain has increased its market share with its grocery division.

RBC analyst Richard Chamberlain said the division is in the sweet spot and in a strong position to expand its premium offerings as competitors focus on keeping prices low.

‘M&S’s share price has performed well so far this year, but we expect further growth from the performance of the food sector, full-price clothing sales and M&S’s strong cash flow,’ he said.

The shares have gained almost a third in value this year and are up 62 percent since they rejoined the blue-chip index almost a year ago.

It was a quieter day for the broader market yesterday, with the FTSE 100 rising 0.06 percent or 5.35 points to 8,278.44 and the FTSE 250 rising 0.2 percent or 34.22 points to 20,929.59.

Another major FTSE player, BP, was in the spotlight when a private equity firm invested in one of its companies, which owns part of the Trans-Adriatic natural gas pipeline.

Apollo Global Management has acquired a non-controlling interest in BP Pipelines TAP, a company of the major oil company, which has a 20 percent stake in the project.

BP also said it plans to sell its US onshore wind business. The energy giant’s shares rose slightly by 0.5 percent, or 1.95p, to 406.15p.

Elsewhere in the sector, energy company Union Jack received approval for the expansion of its Wressle oilfield development in North Lincolnshire. Shares rose 4.8 per cent, or 0.75p, to 16.25p.

Gambling software group Playtech has signed a revised deal with Mexican gambling operator Caliente Interactive.

The deal sees the London-listed company acquire a 30.8 percent stake in Cali Interactive, the new holding company for the joint venture Caliplay, and receive an additional £106 million over four years.

In a separate update, Playtech said it expects annual profit to beat market expectations due to a strong performance in its business-to-business division. Shares rose 15.1 percent, or 99p, to 753p.

Video game developer Keywords reported a solid first half, with revenue growing 7 percent to £333 million ($440 million) in the six months to the end of June.

The group expects its £2.1 billion takeover by Swedish private equity firm EQT to close next month. Shares rose slightly by 0.1 percent, or 2p, to 2,428p.

Fund manager JTC is to acquire a Citigroup business for £61 million ($80 million).

The company said the deal to buy Citi Trust, which is expected to close in the first half of next year, would make the US its biggest market. Shares rose 3.9 percent, or 42p, to 1,134p.