Shares in Wm Morrison Supermarkets (LON:MRW) have been steady in today’s session, outperforming the broader UK market, as analysts at Exane BNP Paribas named the blue-chip grocer as their top pick in the sector. The move comes ahead of the London-listed group’s results tomorrow when Morrisons is likely to unveil a rise in half-year sales.
As of 14:38 BST, Morrisons’ share price had added 0.19 percent to 244.30p, outperforming the benchmark FTSE 100 index which has slipped marginally into the red and is currently 0.24 percent worse off at 7,383.29 points. The grocer’s shares have added more than 26 percent to their value over the past year, and are up by some five percent in the year-to-date.
Exane BNP Paribas today recommended Morrisons as a top sector pick today, noting that the company had “comfortably the strongest balance sheet of the Big Four,” as quoted by Sharecast. The analysts pointed to the fact that the grocer owns 90 percent of its store estate and has a net pension asset.
“Coupled with continued improvements in the offer, a favourable format mix, catch-up potential in fast growing, higher margin categories like organics, not to mention cost saving, we think the business is the most attractive of the UK food retailers,” the broker pointed out.
The comments come ahead of Morrisons’ interim results tomorrow and City A.M. reports that analysts at Shore Capital are forecasting like-for-like sales growth of between 1.5 percent and two percent.
“We believe that Morrison has delivered another quarter of trading and financial progress set upon the firmer foundations of the prior two years’ hard work to demonstrably set the business in the best position it has been for some time, with more fixing and rebuilding to do plus ongoing growth to come,” ShoreCap pointed out, as quoted by the newswire.