Morrisons share price steady as analysts weigh in on results

on Sep 16, 2016
Updated: Mar 11, 2020

Shares in Wm Morrison Supermarkets (LON:MRW) have gained ground in early morning trade, extending yesterday’s advance, in the wake of the group’s better-than-expected interim results. Shore Capital, the group’s corporate broker, weighed in on the update, noting that it was interesting that Morrisons’ stock remained so heavily shorted.

As of 08:25 BST, Morrisons’ share price had added 0.07 percent to stand at 208.24p, slightly outperforming the benchmark FTSE 100 index which has slipped marginally into the red and is currently 0.22 percent worse off at 6,715.47 points. The group’s shares have gained more than 30 percent over the past year, and are up by some 40 percent in the year-to-date.
Shore Capital, which as Morrisons’ corporate broker does not have a target price or recommendation on the stock, noted yesterday that the company had posted “stronger-than-expected Q2 like-for-like sales growth”.
“Furthermore, the group has once again been prodigious in its cash generation, with the year-end net debt guidance lowered so further de-leveraging and bolstering already robust solvency ratios; the strongest of the FTSE 100 supermarkets,” the broker’s analyst Clive Black commented, as quoted by Citywire, adding that Shore Capital finds it “interesting that Morrisons’ stock is so heavily shorted, noting that rarely in the last decade have we felt so warm towards the group’s prospects”.
Reuters quoted Paul Mumford, fund manager at Cavendish, as commenting that the grocer was currently the second most shorted UK stock. Some 18 percent of the supermarket’s shares are out on loan with investors betting they will fall, with levels for FTSE 100 rivals Tesco (LON:TSCO) and Sainsbury’s (LON:SBRY) not far behind.
“Should these positions be forced into reverse, prices will buoy (further),” he pointed out.
As of 09:03 BST, Friday, 16 September, Wm. Morrison Supermarkets plc share price is 196.65p.