Equities Update: M&S, SSE, Baidu, Greggs, Vodafone…

M&S cyber-attack threatens to derail momentum 

Mark Crouch, market analyst for eToro says: “Marks & Spencer had barely put a foot wrong in the last couple of years, so the recent cyber-attack has not only rattled the retailer but also taken the shine off what was otherwise another strong set of full-year earnings. Despite profits surging over 20% to a 15-year high, investors are more focused on the fallout from the breach than on the financial results themselves.

“While the full scale of the impact is still emerging, the financial costs to M&S are expected to run into the hundreds of millions. The reputational damage is harder to measure, M&S had been enjoying a continued spell of positive momentum, so this breach could threaten to undo much of the goodwill earned in recent years. Management will now be under pressure to act decisively, not only to fix the immediate issue but to reassure customers and investors that the company’s transformation story remains intact.”

SSE profits slip with net zero off target

Adam Vettese, market analyst at eToro says:“SSE has seen pre-tax profit slump by 26%, driven by lower margins and higher costs. This can partially be explained by the almost £3 billion invested in infrastructure, with a large portion directed towards renewables. Despite the investment, SSE has warned it will not meet the 2030 net zero targets as the progress in decarbonisation has been slower than expected. Offshore wind projects such as Viking and Seagreen have had their outputs severely curtailed due to lack of grid capacity, which suggests the issues to be solved go far beyond individual projects.

“Despite the profit miss, earnings per share was in line with expectations and the company hiked the dividend by 7%. Investors will be pleased that despite volatile energy markets, SSE is still a safe pair of hands delivering some level of consistency.”

Baidu’s AI Story is taking shape, slowly, but credibly

Lale Akoner, global market analyst at eToro says: “Baidu’s Q1 beat is encouraging, but investors need to stay clear-eyed. A 3% revenue rebound, and a profit surge show its AI strategy isn’t just smoke, in fact AI Cloud is starting to pull its weight. In an economy still weighed down by weak consumer demand and policy uncertainty, that’s no small feat. Still, this isn’t a clean growth story. The core ad business is fading fast, squeezed by shifting user habits and a brutal content war with Douyin and Xiaohongshu.

“Ernie, once positioned as China’s ChatGPT, is already being outshined by models like DeepSeek and Alibaba’s Qwen. Compared to Alibaba, which is leveraging open-source AI and a broader e-commerce base, Baidu’s narrower exposure makes it more vulnerable to macro and competitive shocks. But it’s too early to count Baidu out.

“Its focus on infrastructure, AI cloud, self-developed chips, and autonomous driving, could give it more staying power than the hype-chasers. The robotaxi push into Europe is ambitious, and if executed well, it could reshape Baidu’s future. For retail investors, this is no rocket ride, but for those with patience and a tolerance for bumps, Baidu may yet prove to be a durable AI play in a crowded field.”

Greggs shares jump on sales improvement

Adam Vettese, market analyst at eToro says: “If signs of economic recovery are measured in sausage rolls then perhaps this is one. After a lacklustre first nine weeks of the year blamed on the tough backdrop, Greggs has turned things around with a much improved 2.9% increase in sales.

New store openings, increased delivery sales as well as new products going viral on TikTok have all contributed to the improvement. The expanded menu does seem to be resonating with the customer base although there was no change in forward guidance, which does suggest some caution that Greggs is not getting ahead of itself just yet.

Shares are still down 25% for the year despite this morning’s spike, which means there is some potential upside there for investors who think Greggs can keep up the momentum.

Stuck in transition Vodafone struggling to find a footing 

Mark Crouch, market analyst for eToro says: “A restructuring overhaul has dominated Vodafone’s strategy over the last two years, and based on the latest earnings, it’s hard to gauge whether that time has been well spent. Despite pockets of growth in Europe and Africa, performance in Germany, Vodafone’s largest market, remains a persistent drag.

“Vodafone still generates substantial revenue and respectable free cash flow, yet while Vodafone focuses inward attempting to get its house in order, competitors are seizing the initiative in what remains an intensely competitive industry.

“CEO Margherita Della Valle has moved decisively to streamline operations, reduce costs, and simplify the company’s sprawling portfolio. But the path to reviving Vodafone to something reminiscent of its former stature, will require more than cost cutting and consolidation.

“Much hope still rests on the proposed merger with Three UK. But that deal brings its own complexities and integration risks, and it’s unclear whether it will solve Vodafone’s broader strategic issues, it could even amplify them.”