City analysts are forecasting further gains for Marks and Spencer Group shares, which have already outpaced the broader market by a significant margin in 2026.
Marks and Spencer (LSE: MKS) shares are up approximately 16% year to date, which is more than twice the return delivered by the FTSE 100 index over the same period.
The average 12-month price target among analysts currently sits at 431.5p, representing around 12% upside from the current share price.
A £5,000 investment made today could grow to approximately £5,600 if that consensus target is reached, and that figure excludes any dividend income.
The dividend yield currently stands at around 2%, which could add a further £100 or so to overall returns over the next 12 months.
For the financial year commencing 1 April 2027, the food and fashion retailer is expected to generate earnings of 35.7p per share, implying a price-to-earnings ratio of 11.5 at the target price.
That earnings multiple is relatively modest, particularly given that earnings growth in the next financial year is expected to come in at around 8%.
Applying the price-to-earnings-to-growth methodology, the retailer’s PEG ratio comes out at approximately 1.4, which analysts generally do not consider an elevated valuation.
Of 18 firms currently covering the stock, 16 rate Marks and Spencer shares as either a Buy or Strong Buy, reflecting broad confidence in the company’s near-term outlook.
Marks and Spencer said earlier this month that it plans to return more cash to shareholders in the coming years, which could mean higher dividends and increased share buybacks ahead.
However, a number of risks could disrupt those forecasts, including weakening consumer demand, rising oil prices that push up transportation and energy costs, and potential cost pressures tied to refrigeration upgrades.
The company has confirmed it is planning to increase spending on refrigeration after its fridges struggled to cope during June’s heatwave, adding a layer of uncertainty to its cost base.
Investors will also be mindful of the significant damage caused by a cyberattack last year, which had a material negative impact on both the company’s earnings and its share price.
M&S does serve a more affluent consumer demographic, which tends to provide some insulation against broader economic downturns and softening household spending.
The retailer’s strong brand positioning and loyal customer base remain key pillars supporting analyst optimism about the stock’s trajectory through the rest of 2026 and into 2027.