Shares in Marks and Spencer (M&S) are poised to soar to their highest value in a decade, despite the FTSE 100 heavyweight grappling with a significant cyber attack.
Following the release of the British institution's annual results, market analysts are forecasting that M&S shares will climb to over 420p each, as reported by .
The last time the retailer's shares traded at this level was back in December 2015.
Currently, they stand at 366p, having taken a tumble after news of the cyber attack first broke in April.
In May, City AM reported a six per cent rise in M&S's revenue to £13.8bn during its most recent financial year.
However, its pre-tax profit took a near 24 per cent hit, dropping to £511.8m over the same timeframe.
M&S also announced plans to hike its annual dividend by 20 per cent to 3.6p per share this year.
The cyber attack is projected to set M&S back around £300m.
Earlier in June, City AM revealed that the surge in M&S's share price prior to the major cyber attack contributed to a hefty increase in the CEO's remuneration, pushing it past the £7m mark.
Stuart Machin pocketed just over £7m for the retailer's latest financial year, a substantial increase from the £5m he earned in the previous 12 months.
The uptick in M&S's share price during the financial year ending March this year played a key role in boosting the pay package as the retailer's turnaround strategy began to bear fruit.
M&S experienced a surge in share price during its latest financial year, opening at approximately 260p and closing the period at around 356p, resulting in a significant addition to the company's market value.
Are M&S shares really set to jump?
Post-analysis of M&S's annual results and the cyber-attack repercussions shows that analysts are now focusing on the potential trajectory of the retailer's share price.
Keith Bowman of Interactive Investor commented: "For investors, an expected hit to operating profit of £300m from its cyber-attack incident is an overhang."
Additionally, he noted: "Both sales (-seven per cent) and profit (-three per cent) for the international business retreated over this latest financial year."
Bowman highlighted the issues with the joint venture with Ocado, mentioning: "Its 50:50 joint venture with Ocado continues to lose money, while a forecast dividend yield of 1.6 per cent compares to 3.5 per cent or more at fellow retailers Tesco and Sainsbury's."
On a positive note, he added: "On the upside, improving sales continue to beef up the group's balance sheet, with cash held prior to store lease liabilities increasing almost ten-fold year-over-year to £438m and net debt including store leases falling 17 per cent to £1.79bn."
He concluded with the potential silver lining regarding the recent cybersecurity events: "Insurance payouts may yet reduce the hit from cyber-crime to below £300m, with the attack also speeding up its technology changes and investment.
"Group transformation plans are ongoing including new management at the international business, while cost savings of £120m were made over the past year, with the ambition to achieve cumulative savings of over £500m by March 2028. ".
"In all, and while the impact of the cyber attack injects some caution, strengthening group finances and a consensus analyst estimate of fair value sat above 420p provide room for longer-term optimism."
