With thousands of growth shares in the world to choose from, it can be difficult for time-poor investors to know which ones to pick. But institutional investors spend their working days looking for lucrative opportunities. Here are two that City professionals have flagged for 2026.
Simply M&S
Analysts at Berenberg bank rate Marks & Spencer (LSE:MKS) as a Buy. Also, Hargreaves Lansdown has put the retailer on its Five Shares to Watch list for 2026.
The group’s finances took a major hit in April 2025, when it suffered a cyber attack. Some estimates reckon it cost the group close to £300m. And because of this, I’m confident that it’s unlikely to happen again, certainly over the next few years. I reckon the group’s directors will be taking every precaution — and engaging the best in the IT security business – to make the retailer’s systems as secure as possible.
Analysts have a 12-month price target that’s around 20% higher than today’s (20 January) share price. Based on Berenberg’s March 2027 forecast, it says the stock’s currently trading on just 10 times earnings.
A surprising prediction
One prediction I find particularly interesting is that by 2027, Marks & Spencer’s stock could be yielding 3%-4%. When I first saw this, I must admit I raised one of my eyebrows. After all, based on amounts paid over the past 12 months, its yield is 1%. However, a quick look back in history confirms that in the late 2010s, it was a pretty good dividend payer. I agree there’s plenty of scope for its payout to be increased further, if earnings can continue to grow. For its March 2025 financial year, its dividend was equal to only 11% of earnings per share (EPS).
But retailing’s tough, especially on the high street. Business rates put the group at a competitive disadvantage to online rivals who have no bricks and mortar stores. And as the business knows only too well, clothing can quickly fall out of fashion.
However, the group’s food offer continues to grow rapidly and its joint venture with Ocado is the fastest growing UK grocery business. I reckon the British icon will bounce back strongly. Its fashion, home, and beauty division is still recovering from the attack and I see no reason why this trend can’t continue. On balance, I think Marks & Spencer’s a long-term growth stock to consider.
Another option
Berenberg’s analysts have had a busy start to the year. As well as reviewing Marks & Spencer’s prospects, they’ve also upgraded Vodafone (LSE:VOD) from Hold to Buy. They’ve a new price target of 119p, which is around 19% higher than the telecoms group’s current share price.
The business still faces some challenges. It’s continuing to lose customers in Germany and it’s continually under pressure to find the cash to spend on expensive infrastructure.
However, it’s doing well in Africa. And efficiency savings are expected from the merger of the UK’s operations with Three. Analysts are expecting a 44% improvement in adjusted EPS over the next three years. It’s also increased its interim dividend and is coming to the end of a £500m share buyback programme.
Personally, I think there are some early signs of a recovery. On this basis, I feel the stock’s worth considering.
