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(Sharecast News) - Jefferies upgraded Marks & Spencer and downgraded J Sainsbury in a note published on Thursday assessing the UK general retail sector.
The bank upped its recommendation on M&S to 'buy' from 'hold', despite the blue chip being hit by a major cyberattack.
Jefferies said: "The business continues to demonstrate strong fundamental growth in a buoyant UK consumer environment, buyside expectations for profit delivery in 2025/26 have moderated to more sustainable levels [and] we find no evidence at this stage that the cyberattack will impact medium-term share gains."
It also upped the price target, to 440p from 370p.
But it opted to cut Sainsbury's rating to 'hold' from 'buy', citing recent share price gains.
Jefferies said: "Our view of Sainsbury's market share opportunities in 2025/26 remains unchanged, but recent [share price] outperformance limits near-term upside.
"We continue to see Sainsbury's food space growth and elevated cost save programme offering space for earnings resilience this year.
"Our move to 'hold' entirely reflects the shares' recent outperformance, with our estimates and price target unchanged."
Jefferies has a price target of 300p on Sainsbury's.
Elsewhere, Shore Capital downgraded Close Brothers to 'hold' from 'buy' following the company's third-quarter update a day earlier, which it called "a bit of a mixed bag".
The broker said news of disappointing loan book growth and a downgrade to guidance was offset by continued positive impairment performance and a better-than-expected capital position.
Winterflood also showed signs of life, it noted, delivering a small profit in the period, following a loss in first half, as market conditions improved.
"We have tweaked our forecasts accordingly and leave our fair value unchanged at 370p. With just 4% upside remaining, we downgrade our recommendation."
Shore pointed out that there was no new information on the motor finance commissions situation for which the group has already set aside a 165m provision to cover potential future remediation costs.
"We expect the Supreme Court to publish its judgement no sooner than July, after which the FCA has indicated that it will take up to six weeks to consider any industrywide redress proposal," it said. "This will then likely be subject to consultation, so clarity on the matter is unlikely to be forthcoming until the back end of the year."
Shore's forecasts still assume a further 135m provision will be required in FY26, taking the total to 300m.