Taking a look at Marks and Spencer (LSE: MKS) shares within the wake of the Easter weekend cyberattack, one outstanding factor strikes me.

On-line procuring was disrupted and has solely simply resumed right this moment (10 June), although for a restricted vary of merchandise. Full service may nonetheless take one other few weeks. The assault will in all probability hit income by round £300m for the 2025-26 yr, however insurance coverage ought to cowl a few of it.

What’s the important thing factor that struck me? It’s the M&S share price resilience. It dipped a bit within the weeks following the turmoil, however not a lot. It’s already bounced part-way again and is up 20% prior to now 12 months. We’re a five-year achieve of 230%.

Subsequent 12 months

Investor sentiment is powerful with this one. However even after the previous few storming years, the valuation doesn’t look that top and I see a great probability of extra to come back. Metropolis analysts appear to assume so too.

Forecasts for the 2025-26 yr put the price-to-earnings (P/E) ratio at a bit over 14. We additionally see a PEG ratio of a really low 0.2. That compares the P/E with the anticipated earnings development price, and decrease is best. Progress traders usually see something below 1 as worthy of nearer consideration. And a PEG beneath 0.7 can get them fairly excited.

These forecasts will amost definitely be revised after we know the extent of the cyberattack injury. And M&S shares won’t look fairly such good worth.

Additional ahead

But it surely appears unlikely at this stage that it’ll have any impact on income for the 2026-27 yr. And the forecasts there look even higher.

In the event that they’re proper, earnings development may knock the P/E down below 11. And for that yr, we may see a PEG of 0.3.

So a yr from now, we could be sat right here an identical rosy outlook for the next 12 months. However with an much more enticing valuation… if the share price doesn’t rise by then, that’s.

Share price

The place do the pundits see the share price going? With a reasonably robust Purchase consensus, the typical price goal is round 410p. That’s 13% forward of the price of the time of writing. And it may flip £10,000 into £11,300.

And primarily based on earnings forecasts for 2026-27, a yr from now we may nonetheless see a ahead P/E of solely a bit over 12 — even when the M&S share price hits that focus on.

The higher finish of the price goal vary, at 460p, would get that ahead P/E subsequent yr near 14, which is about the place it’s now. That’s a 24% share price rise from right this moment. And it may flip our £10,000 into £12,400.

Threat vs reward

We’re undoubtedly nonetheless some short-term threat right here as M&S emerges from the cyberattack. And we mustn’t neglect that the UK retail sector nonetheless faces stress from financial weak point, rates of interest, and intense price competitors.

However I do assume I’m seeing undervaluation right here, and traders may do effectively to think about Marks and Spencer.