UK-based Marks and Spencer PLC (GB:MKS) is all set to rejoin the FTSE 100 index after a significant boost in its share price, marking its return to the big league after a four-year hiatus. In 2019, M&S lost its position in the FTSE 100 list due to declining sales and profits due to intense competition in the market. The retailer had been a member of the blue-chip index since its inception in 1984.
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Along with M&S, UK-based pharma players Dechra Pharmaceuticals PLC (GB:DPH) and Hikma Pharmaceuticals (GB:HIK) and Diploma PLC (GB:DPLM), a provider of technical products, will also join the FTSE 100 index.
On the other hand, investment company abrdn PLC (GB:ABDN), homebuilder Persimmon PLC (GB:PSN), and two others will be moved down to the FTSE 250 index, apt for mid-cap companies.
The changes will come into effect at the commencement of trading on September 18.
M&S Turnaround
This year, the M&S share price has experienced a notable surge, propelling its market value to over £4 billion. YTD, the shares have gained more than 75% in trading. This success can be attributed to its ability to thrive amidst the cost of living crisis by enhancing the value for money of both its clothing and food offerings.
The company balanced its high-street fashion with fresh and affordable brands and also offered services like cheaper returns and click-and-collect, giving it a competitive edge in the market. Earlier in August, the company revised its profit forecast for the fiscal year 2023–24 upward, boosted by its expanding presence in categories like clothing, groceries, and home goods.
Is Marks and Spencer a Good Share to Buy?
Analysts see this comeback as a favorable result of its turnaround strategy, which was successfully led by its CEO, Stuart Machin, and started by his predecessor. They also believe that the company’s margin goals of 4% in food and 10% in clothing could potentially drive the share price to exceed 300p.
According to TipRanks’ consensus, MKS stock has a Moderate Buy rating based on three Buy and three Hold recommendations. The M&S share price target is 235.83p, which is 5.28% above the current trading levels.
