Morrisons share price dips as Jefferies trims stance on grocer

on Nov 1, 2016
Updated: Oct 21, 2019
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Shares in Wm Morrison Supermarkets (LON:MRW) have fallen into the red in today’s session after analysts at Jefferies trimmed their stance on the blue-chip grocer, with the stock having significantly outperformed the benchmark FTSE 100 index in the year-to-date. The move comes ahead of the supermarket’s quarterly update on Thursday.

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As of 14:38 GMT, Morrisons’ share price had lost 1.48 percent to stand at 223.15p, underperforming the broader London market with the blue-chip FTSE 100 index currently 0.15 percent worse off at 6,943.69 points. The supermarket’s shares have gained more than 50 percent this year, as compared with about an 11-percent rise in the Footsie.
Jefferies trimmed its rating on Morrisons to ‘hold’ today, saying that the stock has outperformed the FTSE 100 by as much as 40 percent this year. The analysts, however, hiked their price target on the shares from 210p to 225p. While Jefferies, which is the supermarket’s corporate broker, did not rule out the potential for more material upside further down the line it said this “requires the ability to construct a more positive industry narrative than we currently feel possible”.

The comments come ahead of Morrisons’ quarterly update on Thursday. Sharecast quoted the broker as forecasting like-for-like sales growth forecast of 1.2 percent. Jefferies’ analyst James Grzinic further noted that the FTSE 100 group is the best placed of all UK grocers given the combination of its balance sheet, high freehold ownership and vertical integration advantages.
The 17 analysts offering 12-month price targets for Morrisons for the Financial Times have a median target of 200.00p, with a high estimate of 230.00p and a low estimate of 130.00p. As of October 28, the consensus forecast amongst 22 polled investment analysts covering the stock advises investors to hold their position in the company.
As of 15:10 GMT, Tuesday, 01 November, Wm. Morrison Supermarkets plc share price is 196.65p.

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