Victoria Wood, the British comedian, once joked: “I know I’m different sizes in different shops, 16 in some, 18 in others. In Marks and Spencer’s, I’m only a size three because they don’t want to upset anybody.”

Then and now

Although those who bought the retailer’s shares in April 2021 might not be laughing all the way to the bank, they’re probably patting themselves on the back.

A £5,000 investment at the time would have bought 3,185 shares. Today (15 April), they’re worth (excluding dividends) an impressive £11,498. As an illustration of how well investors have done, the same investment now would get them 1,800 fewer shares.

But does a 130% rise in the retailer’s share price mean it’s too late to consider the stock? Let’s see.

Growth opportunity

Although the group is probably more talked about for its clothing, it’s the food side of the business that most interests me.

Over the past three financial years, fashion, home, and beauty customer numbers have remained flat. Last year, they were overtaken by grocery shoppers for the first time. Food customers have increased 9% over the period and, significantly, they’re making an average of 2.9 more visits a year to the group’s shops.

Indeed, the company has set itself the target of doubling the size of its grocery business over the long term. To achieve this, it’s aiming to increase its number of food-only stores from 328 to 420.

Sometimes it’s forgotten that, since September 2020, the group’s had a joint venture with Ocado. During the 12 weeks to 22 March, it recorded a 2.2% share of the British grocery market. It’s never been higher.

Some challenges

Undoubtedly, there was a loss of investor confidence following last year’s cyberattack. This cost a lot to put right but, more significantly, led to some loyal customers shopping elsewhere.

Despite this, they came back and the group’s reputation with consumers appears unharmed. According to polling by YouGov, based on a combination of perception, quality, value, reputation, and satisfaction, it remains the nation’s best brand.

Of course, operating a chain of shops is logistically challenging. And the fashion industry is notoriously difficult to get right with consumer tastes changing quickly. That’s another reason why I believe the emphasis on its less-cyclical food business is the right strategy.

Final thoughts

Personally, I think the group’s made great strides over the past 10 years or so, with progress only interrupted by the pandemic. Both its profit before tax and return on capital employed are going in the right direction.

And despite changing shopping habits, it remains an important part of Britain’s high streets and retail parks.

I like what I see. That’s why I think it’s a stock to consider.

The post 5 years ago, £5,000 bought 3,185 Marks & Spencer shares. But how many would it buy now? appeared first on The Motley Fool UK.

In fact, with enough time and compounding, even FTSE 100 stocks can eventually grow a modest portfolio to millionaire territory.

So, how can investors actually find these top-notch stocks? And which companies are the experts backing on their wealth-building journeys?

The best UK shares use short-term challenges

At some point along its journey, a business will encounter enormous disruptions or challenges.

But it’s the businesses with the financial resources, superior cash flows, and competitive advantages that are often the ones that make it through the storm.

The strongest of these are those that leverage short-term chaos to steal market share from their weaker rivals. That way, when the wider industry or market cycle starts to recover, the business will be in a much stronger position to dominate and reward shareholders with chunky long-term returns.

So, the question now becomes, which UK companies are currently trying to do just that?

Spoilt for choice

In 2026, there is a long list of companies investing through the short-term downturn in the pursuit of long-term gains.

Barratt Redrow is consolidating smaller homebuilders in a falling housing cycle. Greggs is building out new factory facilities to support an expanding network of retail stores during a consumer spending slowdown. And BT Group is revamping its telecommunications infrastructure to bring down operating costs in an inflationary environment.

But one FTSE company that currently stands out as potentially one of the best shares to consider buying now is Marks & Spencer (LSE:MKS).

Under the new leadership of Stuart Machin since 2022, the company has significantly changed its destiny, expanding its food business ahead of the industry while simultaneously capturing previously lost ground within the fashion sector. In fact, during 2025, Marks & Spencer achieved its highest market share in womenswear in nine years.

This operational momentum has already delivered a 130%+ increase in the stock’s market cap over the last five years, or around 19% on an average annualised basis.

However, with the forward price-to-earnings ratio standing at just 10.5, some institutional analysts think more momentum could still lie ahead.

For example, the team at UBS recently issued a 425p share price target – roughly 16% ahead of current levels. And if M&S continues to outpace its industry in the long run, the stock could turn into a quality compounder that eventually helps elevate a portfolio to seven-figure territory.

What’s the verdict

While M&S shows promise, it’s important to recognise it’s not a risk-free investment. As a more premium food retailer, the company can be sensitive to economic shocks as consumers seek better value for money from fiercely competitive discounters.

There’s also understandable concern about the firm’s ability to protect its upgraded technological infrastructure. After all, its cybersecurity systems failed to protect the firm from a ransomware attack last year. And while the business has seemingly bounced back, another breach could signal a more structural vulnerability.

Nevertheless, for investors looking for potential top-notch shares to buy that are hiding in plain sight, Marks & Spencer could be worth a closer look.

The post What are the best UK shares to buy now to try and make a million? appeared first on The Motley Fool UK.

As most readers will know, the conflict in the Gulf has weighed on the stock market. Some stocks are down more than others. And that depends on their exposure.

Personally, my strategy is to buy stocks when the market is taking a hammering. It might sound painful, but it’s how some of the best investors operate.

However, I appreciate some investors may wish for tensions to die down before investing further.

Geography matters

Around 20% of the world’s oil passes through the Straits of Hormuz every single day. When that shipping lane is disrupted or threatened, oil prices stay elevated — and elevated oil doesn’t just mean expensive petrol at the forecourt. It ripples through the entire economy.

Jet fuel, which is essentially refined crude oil, is one of the largest single cost lines for any airline or package holiday operator (as much as 35% of operating costs). And food inflation is partly an oil story too, because energy costs sit inside fertilisers, packaging, cold storage, and logistics.

This is why both Jet2 (LSE:JET2) and Marks & Spencer (LSE:MKS) have been hit by the conflict despite having almost no operational exposure there.

Jet2: priced for disaster

Jet2’s share price has fallen 42% from its 52-week high to 1,121p.

It now trades at just 6.3 times forward earnings (P/E). That alone looks good value relative to peers, but the company also boasts an incredibly strong balance sheet. Remember, P/E ratios are only really relevant when they’re contextual.

Jet2’s balance sheet is fortress-like, and that makes it well positioned to navigate uncertainty like this. It’s a little confusing because of the presentation in the earnings documents, but the company appears to have a net cash position of £800. That’s substantial for a company generating about £400m in net earnings per year.

Of course, a prolonged conflict here is a risk. Jet2 is phenomenally well hedged — over 75% of jet fuel purchased for the year — but the longer the conflict goes on, the greater the exposure becomes to sky-high spot prices.

It’s worth considering. Definitely my favourite in the sector.

Marks & Spencer: just needs a clean break

M&S has had its own difficult year — remember the ransomware attack.

Right now, however, UK grocery inflation is still running at 4.3%, squeezing food margins and dampening consumer sentiment. The irony is that M&S’s underlying business is performing well — revenues rose 23% in its last half-year to £7.94bn, and analysts expect earnings per share to grow 46% this year to 22.7p. In turn, this implies a forward PE of just 10.7 times.

The war, of course, threatens more inflationary pressure, starting with fertiliser costs. The shorter the conflict, the quicker the recovery.

Nonetheless, this is an excellent business, with genuine operational momentum. It’s absolutely worth considering, and the risk profile will decrease if the conflict ceases.

The post Consider these 2 dirt-cheap stocks to buy if the Straits of Hormuz permanently reopen appeared first on The Motley Fool UK.

Price and value often drift apart in shares, especially when a business turnaround is gathering pace beneath the surface. In this case, M&S’s revival in Food and Clothing is now showing up in sustained market‑share gains and a far healthier adjusted earnings profile than the headline numbers imply.

So, how does the earnings trajectory look now, and how wide is the price-to-valuation gap?

Strong earnings momentum?

Earnings growth ultimately drives any firm’s share price. A risk to M&S is any further cyberattack of the sort announced last April, which prompted the share price slide. Another is any slowdown in UK consumer spending that could squeeze discretionary sales.

That said, consensus analysts’ forecasts are that M&S’s earnings will soar by an average 34% a year over the medium term. It latest major results (H1 2025) look supportive of this, with sales jumping 22.1% year on year to nearly £7.9bn. The number underlines the strength of M&S’s multi‑channel model (stores, online, third‑party partnerships), and the benefits of consolidating Ocado Retail.

Food remained the standout performer, with sales up 7.8% to £4.5bn. This underscored the continued success of its value‑and‑quality strategy and three years of consecutive monthly volume growth.

The International division also contributed positively, with operating profit up 24.3% to £13.3m, illustrating the gains from its commercial reset.

Together, these drivers point to a business with clear momentum as systems reset following the cyber incident and new investment pays off.

What’s the real value of the shares?

With that operational momentum in place, the next question is what all this progress means for the stock’s valuation.

Discounted cash flow analysis allows investors to identify where any share should trade by projecting future cash flows and ‘discounting’ them back to today.

Some analysts’ DCF modelling is more conservative than mine, due to the data used. However, based on my DCF assumptions (including a 7.5% discount rate), M&S shares are 58% undervalued at their current £3.52 price.

This implies a fair value for the shares of around £8.38 — more than double where they trade today.

So that gap suggests a potentially superb buying opportunity to consider today if those DCF assumptions prove accurate.

My investment view

With earnings momentum building and the price-to-valuation gap still wide, I see M&S as a compelling opportunity.

The combination of strong Food performance, improving group profitability, and the long‑term benefits of Ocado Retail makes me optimistic about the earnings trajectory.

On that basis, I will be buying more shares soon, and I think they are worth the attention of other investors too. I also have my eye on other deeply discounted, high-growth stocks…

The post Marks and Spencer’s share price is down 16% to below £4! Is now the time for me to buy the dip with an eye to £8+? appeared first on The Motley Fool UK.

Shift in sentiment

The main driver behind the move lower was a change in sentiment following the outbreak of the conflict in the Middle East. Marks & Spencer does have some exposure to the region via a partnership with the Al-Futtaim Group. But the bigger concern is the indirect impact from knock-on effects. The high-street retailer is a bellwether for the UK consumer, and that wasn’t something to shout about during March.

Investors are increasingly cautious about the UK consumer, with sticky inflation, higher interest rates, and pressure on disposable income all raising questions about how resilient spending will be through 2026. Let’s take inflation as an example. The rise in energy prices has led the OECD to publish a report last week, expecting UK inflation to hit 4% by the end of the year. If this happens, it would put pressure on Marks & Spencer’s profit margins. If they choose to raise prices, it could see lower demand.

Regarding interest rates, the Bank of England’s committee might be forced to raise the base rate later this summer to counter inflationary concerns. The latest half-year results from last year showed net debt rose by 16.7% to £2.53bn. So higher financing costs would negatively impact the company (and financial results).

Therefore, even though the company didn’t publish any trading updates or major news during March, the drop reflects a change in investor expectations based on the ongoing impact of the war abroad. Long-term investors still need to be mindful of such short-term moves.

The view from here

Although I don’t want to sound like I’m sitting on the fence, a large part of the direction from here does depend on how quickly things can de-escalate in the Middle East. If we get a resolution in the coming weeks, it could significantly reduce the pass-through impact on inflation. The lower impact here could then mean interest rates don’t rise, in turn boosting consumer confidence in spending activity at Marks & Spencer later this year.

However, even if the conflict keeps going, the company could find some insulation from the increasingly diversified product offering. The food division continues to deliver strong growth and premium positioning. The clothing and home segment (once a persistent underperformer) has shown sustained improvement in both style and profitability. We haven’t even spoken about the various partnerships in place, which could further act to buffer any revenue hit from other areas.

In terms of risks (aside from the war), competition remains fierce. This is particularly true for the clothing and grocery divisions. Yet even with this, I think it commands a much better position in the market than in years past.

The stock is down 5% over the past year. Although I’m cautious about the immediate outlook, I think investors could consider allocating a small amount of funds as a starter position in the stock, and then pound-cost-average over the coming months.

The post Why the Marks & Spencer share price fell 12% in March appeared first on The Motley Fool UK.

Looking for opportunities in the UK market today? Here are three stocks that could be worth a closer look.

Big dividends on offer

UK investors love big dividends so let’s start with a stock sporting a high yield, Aviva (LSE: AV.). It’s a well-established insurance and investment company.

Its share price has recently fallen to around 620p, versus 700p earlier in the year. At the current share price, the stock is trading on a forward-looking price-to-earnings (P/E) ratio of about 11 and offering a 6.4% dividend yield.

This company has been performing well recently. Last year, for example, group adjusted profit was £2.2bn, up from £1.8bn in 2024.

On the back of this performance, the insurer hiked its dividend by 10% (signalling that management is confident about the future). It also announced a £350m share buyback.

It’s worth noting that if the stock market keeps falling, Aviva’s wealth management revenues are going to take a hit.

Taking a five-year view though (our preferred time horizon here at The Motley Fool), I think Aviva shares should provide attractive returns.

An oversold name

Next we have Marks & Spencer (LSE: MKS). I see this retail stock as more of an oversold name that could rebound.

It’s currently trading near 340p. Back in late February, it was near 410p.

Now, when I talk about this stock being ‘oversold’, I’m not just saying it because the share price has tanked. I’m actually referring to a technical indicator known as the Relative Strength Index (RSI).

This measures the magnitude of share price movements. With this indicator, a reading under 30 signals that a stock is oversold and Marks and Spencer currently has a reading of 29.

I’ll point out that the spike in oil prices is a risk for this company. It could lead to higher transportation and energy costs and also potentially impact consumer demand.

One thing that this company has going for it, however, is that its customer base is a little more affluent. This could shelter it from a consumer slowdown.

A cheap AI stock

My third stock is a little racier. It’s Volex (LSE: VLX), a UK-based manufacturer of power cords, cables, and data connectivity products for ‘mission critical’ applications.

It’s currently trading for about 428p. This time last month, its share price was near 500p.

This company has momentum at the moment, thanks to its strategy of focusing on high-growth markets such as data centres (AI) and electric vehicles. In January, it said that revenue for the first nine months of its financial year was up 15% year on year and that full-year revenue would be ahead of expectations.

Of course, manufacturing tends to be cyclical. So, if we see an economic collapse as a result of high oil prices, this stock could underperform.

With the price-to-earnings ratio now under 15, however, I like the risk/reward set-up. I think it’s worthy of further research.

The post 3 shares to consider buying as the FTSE 100 plummets appeared first on The Motley Fool UK.

Over five years, the Marks & Spencer share price has soared 182%, sending it flying back into the FTSE 100. A large part of that turnaround is down to chief executive Stuart Machin. He took the helm in 2022 after previously running food. On his watch, M&S sharpened its focus, improved product ranges, tightened costs, and restored credibility with investors.

Its revitalised food business continues to gobble up market share, and its clothing and home operation is also much improved. The group has cut costs and closed underperforming sites. It has also invested heavily in data and online capability, and pushed ahead with logistics automation.

This top FTSE stock is back

Last year’s cyber attack is expected to knock an incredible £300m or so off 2025/26 operating profits. However, the shares are still up a modest 13% over the year. This is thanks to a burst of momentum over the last month. They climbed 9.8% in February, which would have turned £10k into £10,980. Not bad for a few weeks’ work.

Food retailers generally had a good month. Tesco shares jumped 16% and Sainsbury’s rose 8%, helped by easing grocery price inflation. This gave shoppers a bit more breathing space and supported margins too.

This followed a strong Christmas, with like-for-like food sales up 5.6% in the 13 weeks to 27 December, hitting £2.72bn. Its 50:50 joint venture with Ocado Retail is flying. Sales are up 13.7% over the period, and M&S own-label sales on the platform rising even faster.

Low yield, okay valuation

The board is investing hard in its future, modernising its food supply chain, continuing its store renewal programme, and planning hundreds of new or renewed food stores under the Simply Food banner. The valuation doesn’t look stretched, with a price-to-earnings ratio of 12.5.

Shoppers are still struggling, though. And higher employer National Insurance contributions and two inflation-busting minimum wage increases have driven up costs, squeezing margins. Net debt has crept up in recent months, although remains modest when lease liabilities are excluded.

So where do the shares go next? Analyst forecasts produce a consensus one-year price target of 430p. If correct, this is up just 9% from today, plus a prospective yield of 1.1%. That suggests a potential total return just above 10%, which is pretty limp fare. Of course, forecasts can’t be relied upon, and many of these will pre-date the February share price hop.

M&S has had a great run and some may be tempted. But I reckon I can find more exciting growth stories on the FTSE 100 today, and with much juicier yields too.

The post See what £10k in Marks & Spencer shares on 1 February is worth now appeared first on The Motley Fool UK.

Both Food and Clothing are delivering consistent growth, margins are improving, and the business looks structurally stronger than it has in years.

Positively as well, the sharper focus on value, quality, and operatinal efficiency makes this turnaround look durable rather than cyclical.

So how high do I think the shares will go?

Earnings growth momentum

Earnings growth powers any company’s share price (and dividends) over the long term.

A risk to Marks and Spencer is any lingering weakness in its cybersecurity systems following the attack announced on 22 April last year. As a result, management estimated around £300m would be knocked off its fiscal year 2025/26 operating profit.

Despite this, the underlying engines of the business are moving in the right direction, in my view. Its H1 2025 results saw the Food division continue to outperform the wider market.

Sales jumped 7.8% year on year, marking three years of consecutive monthly volume growth.

This signals to me that Marks is winning shoppers on quality, value and innovation rather than just pricing.

In Clothing & Home, the recovery is slower but unmistakably underway. Availability rebounded quickly, as did online traffic, and the new ranges are popular, helped by stronger style credentials and better stock flow.

Added to this are the ongoing store‑renewal programme, the £340m investment in a modernised Food supply chain, and a multi-year push to automate logistics and reduce cost‑to‑serve. Taken together, these initiatives make the medium-term earnings picture look meaningfully stronger than the headline H1 numbers suggest.

In fact, consensus analysts’ estimates are that Marks’ earnings will rise by a whopping average of 34% a year to end-2028. This is a remarkable trajectory for a business once written off as ex-growth.

What’s the true worth of the stock?

I ran a discounted cash flow (DCF) analysis to ascertain the true worth of the shares. This projects future cash flows from the underlying business and discounts them back to today. It also reflects consensus analysts’ earnings growth forecasts for the company.

The DCF model is my preferred valuation method, as it produces a clean, standalone result, unaffected by over- or undervaluations across a business sector.

Some analysts’ DCF modelling is more bearish than mine, and some more bullish, depending on the inputs used. However, based on my DCF assumptions — including an 8% discount rate — Marks’ shares are 54% undervalued at their current £4.04 price.

Therefore, its fair value could secretly be close to £8.78 a share — more than double where the stock trades now.

This gap is extremely important for long-term investor profits, as asset prices tend to trade to their fair value over time. So this suggests a potentially superb buying opportunity to consider today if these forecasts prove accurate.

My investment view

The combination of rising earnings power, stronger trading and a still‑modest valuation makes Marks and Spencer especially attractive to me. So I will keep my holding in the stock.

And I strongly believe the shares will continue converging toward their long-term fair value. Consequently, I think the shares worthy of other investors’ consideration.

The post Here’s why Marks and Spencer’s £4+ share price looks 54% undervalued to me right now appeared first on The Motley Fool UK.

However, based on Marks & Spencer’s (LSE:MKS) earnings over the past year, the retailer is the most expensive stock on the FTSE 100. Surely not? Let’s take a closer look.

Crunching the numbers

During the 52 weeks to 27 September 2025, the British icon reported basic earnings per share (EPS) of 0.9p. With a share price of just under 382p as I write on 11 February, it means the stock’s trading on an eye-watering 424 times earnings. This puts it comfortably at the top of the league table of the FTSE 100’s price-to-earnings (P/E) ratios. By anyone’s standards, this is incredibly expensive.

However, over this period, M&S suffered a devastating cyberattack, from which it still hasn’t fully recovered. This resulted in exceptional charges — estimated to be in the region of £140m – being incurred. On top of this, there was a loss of revenue (and profit) as its website was unavailable for weeks.

Also, from 29 March 2025 to 27 September 2025, net debt increased from £1.79bn to £2.53bn. Having said that, the group remained in a net cash position at the end of this period when lease liabilities are removed.

For obvious reasons, companies prefer to report adjusted earnings that remove the impact of these (hopefully) one-off events. Doing this gives a revised EPS of 23.8p and P/E ratio of 16. Suddenly, the British retailer looks to be a much more attractive prospect.

That’s probably why analysts have a 12-month share price target that’s 15% higher than today’s value. Berenberg says the stock trades on just 10 times its March 2027 forecast earnings. And due to its cash flow potential, the bank’s anticipating that M&S will be in a position to improve its dividend yield to 3%-4%. However, this seems ambitious to me given that the historic (trailing 12 months) return is 0.9%.

Patience is key

But I suspect it will be a while before investor confidence is fully restored, even though I’m certain that the group’s now in a better position to withstand another cyber attack. M&S’s status as a much-loved British institution — and its successful efforts to shed its image as a seller of frumpy clothing — has seen shoppers return.

The group reported a record number of customers over the Christmas season. Its boss said: “Food sales were strong, and the business continues to outperform, hitting a new market share milestone in the period.” Encouragingly, he added: “Fashion, home and beauty is getting back on track as we work through the tail end of recovery.”

The food side of the business continues to be the star performer. And to take advantage of weight-loss drugs leading to smaller appetites, it’s launched a ‘Nutrient Dense’ range. Also, its 50:50 joint venture with Ocado, is doing very well. It’s currently the fastest-growing grocer in the UK.

On reflection, I don’t think Marks & Spencer is the most overvalued FTSE 100 stock. By contrast, I reckon it could be one of its best bargains. For this reason, I think it’s a recovery stock for long-term investors to consider.

The post Is Marks & Spencer the FTSE 100’s most overvalued stock? appeared first on The Motley Fool UK.

Keen observers will note that the share price of 364p is still trading at a discount compared to an all-time high of 699p. Here is how the company might get back to that figure and beyond in the years to come.

Storms and teacups

Hang on a second now! Are we talking about the Marks and Spencer? The beloved British brand that made headlines in the newspapers and threw away £300m last year because of a ransomware cyberattack?

Yes, we are. And that little episode was no storm in a teacup. It wiped out the majority of the company’s earnings for the year. It also gives Marks and Spencer the highest price-to-earnings ratio on the FTSE 100. The stock trades at 409 times earnings!

Don’t be fooled though. As rough as the fallout from the cyberattack was, this is a temporary blip in what has been an excellent few years for the company. A better comparison is to look at the forward P/E ratio which is just 10.8. That is significantly cheaper than the index average.

The issue checked the rise of the share price too. This means investors can buy into Marks and Sparks for cheaper than the shares were back in 2024. So, should they?

Great guns

Marks and Spencer is built around two key divisions – Clothing (around 30% of sales) and Food (around 70%) – and both have been going great guns.

While Clothing has slowed a little recently, it has been more than offset with growth in Food. The firm’s market share has even grown to be equal with Waitrose (including online deliveries in a joint venture with Ocado)!

While the supermarket sector is ruthlessly competitive, the Marks and Spencer market share of just 4.5% suggests there could be room to grow. Most promisingly, it is carving out a niche as one of the best higher-cost shops while still offering cheap staples with its Remarksable Value range.

That market share is on the up too. Marks has made headlines for being the UK’s fastest-growing supermarket on multiple occasions over the last couple of years or so.

On a personal note, the twin threats of inflation and ‘shrinkflation’ (where products get smaller or use fewer ingredients) really seem to be destroying a lot of people’s attitudes towards a lot of typical supermarket offerings. I think this can work in the favour of Marks and Spencer with its focus on higher-quality ingredients and British sourcing, even if it does come at a premium price.

To sum up? I think there’s a lot to like with a valuation that is forecast to be significantly below average. I’d call it one to consider.

The post Are Marks and Spencer shares a slam-dunk buy with a forward P/E of just 11? appeared first on The Motley Fool UK.