The Marks & Spencer [LSE: MKS] share price has risen 6.5% in the past week to approximately 368p as traders bet that the company can get back on track after a damaging cyberattack led to the theft of customer data including names, contact information and order histories. M&S has not yet restored online shopping following the attack, which analysts estimate may have cost the business more than £60m in lost profit. Despite their recent gains, M&S shares are still down more than 10% from April’s nine-year high of over 417p.
As M&S prepares to report its full-year results on Wednesday 21 May, many investors will be wondering whether the business can regain consumers’ trust and, if so, whether the shares’ current predicament represents a potential opportunity to ‘buy the dip’.
M&S to reveal impact of cyberattack
Although Wednesday’s results will cover the 12 months to the end of March, encompassing the period before the cyberattack, investors’ focus will be on how M&S is managing the incident and what it might mean for the company’s outlook. The 141-year-old retailer is likely to have missed out on millions of pounds worth of online sales of summer clothing, picnic food and other seasonal items during the recent spell of warm weather.
M&S has so far said little about the hacking incident that it disclosed on 22 April. Towards the end of April the FTSE 100-listed retailer stopped taking clothing and home orders through its website and app, which usually contribute around a third of sales of those products. Online clothing and home sales are worth about £3.8m a day, according to a Guardian article dated 18 May.
M&S followed government advice not to pay the hackers behind the ransomware attack, according to a report by Reuters on 19 May. Other sources including the BBC have reported that the gang behind the attack uses the name DragonForce, a group which has also claimed responsibility for cyberattacks on retailers including the Co-op and Harrods.
Positive results expected
M&S is expected to report that sales increased 5% to £13.8bn in the year to 29 March, delivering a pre-tax profit of £840m, based on analysts’ estimates. That would mark a significant rise from the previous year’s pre-tax profit of £716m.
However, guidance for the year ahead could play a key role in determining whether M&S shares continue to recover. At current levels near 368p, the M&S share price has moved above its simple moving average, indicating positive upwards momentum. The relative strength index, a momentum indicator, has risen in May to a reading of 54, suggesting further upside potential for M&S stock.
If the shares can continue to follow an uptrend that has formed in the past week, they could rise towards resistance near 384p in the near term. To the downside, there is support at 340p and 320p.
Marks & Spencer share price, January 2025 – present
Overall, the consensus among analysts remains positive. Forecasts compiled by the Financial Times on 15 May show that, among a group of 17 analysts, four rated M&S shares a ‘buy’, 10 ranked them ‘outperform’, and three labelled them a ‘hold’. There were no ‘sell’ or ‘strong sell’ ratings in the sample. Furthermore, of the 16 analysts who offered a 12-month price target for M&S shares, the median estimate of 440p represents a 19.8% increase from Monday 19 May’s closing price of 367.4p, suggesting that the stock has the potential to rise above its April highs over the next year.
Whether that share-price recovery materialises could hinge on tomorrow’s earnings call and what bosses say about the cyberattack. If M&S can overcome the negative impact of lost earnings and the knock to consumer trust, it could be in a position to build on what are likely to be a positive set of full-year results.
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