The M&S comeback story just gets better and better

 

Mark Crouch, analyst at investment platform eToro, says: “Marks and Spencer’s half year results make for dazzling reading. Annual profits soared by 58% as free cash flows more than doubled and debt fell. M&S food delivered market-leading volume growth while the clothing and home sector increased share growth.

“In what has become one of the most emphatic turnarounds seen in British retail in recent years, the M&S comeback story is turning into something of a fairytale for investors. Shares are up over 50% in the last twelve months as the business maintains the trend of attracting new customers and accelerating growth.

“Despite inflationary pressures easing, retailers remain fully engrossed in a tug of war for market share, one where quality and value are proving to be key battlegrounds. M&S, renowned for their quality, has applied focus to offering customers significant value along with it and it seems to be working.

“Investors will be pleased to hear M&S now have the capacity to restore a full year dividend, and judging by these results, they won’t have to wait very long.”

 

All eyes on Nvidia as analysts expect another stellar earnings report

 

Sam North, analyst at investment platform eToro, says: “As the US earnings season wraps up, all eyes are on Nvidia’s upcoming results, set to be revealed on Wednesday evening after the market closes. Despite the stock’s incredible recent performance, there’s tension in the market, with investors eager to see if Nvidia’s impressive momentum from 2023 has carried into early 2024. The company has been riding high on the AI wave, with its stock price soaring over 200% in the previous year and Wall Street is expecting Nvidia to report a whopping $24.5 billion in quarterly revenue, which would be an astounding 240% increase from the previous year.

“Analysts are predicting a beat-and-raise scenario, with some expecting the company to modestly beat analyst expectations on Wednesday. However, we should note that the bar is set pretty high, and another double-digit beat and raise might be a tall order.

“Analysts are also expecting Nvidia to post quarterly earnings of $5.58 per share, which would represent another increase. As a point of note, Nvidia has seen a beat on their EPS for the previous 4 quarters. Another sign of positive sentiment heading into the release stems from the fact that the consensus EPS estimate for the quarter has been revised around 1% higher over the last 30 days to the current level.

Nvidia’s growth remains astonishing, positioning it as the third most valuable company globally, bolstered by the AI boom which is driving its expansion across various industries. Despite facing competition from AMD in graphics processors, Nvidia maintains an 80% market share. However, further market share declines could challenge its growth targets.

“Analyst sentiment remains optimistic, though traditional valuation metrics suggest the stock is highly valued, with a forward P/E ratio of 35. It is also worth noting that as the third largest company in the S&P 500, comprising over 5% of the index, Nvidia’s performance can have a significant impact on the broader market.

“The stock’s fluctuation near the $1,000 mark reflects both the hype and inherent risks, including supply chain issues. Yet, the strong demand for AI chips underpins the positive outlook, affirming AI’s significant role in Nvidia’s present success.”

 

 



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