Morrisons share price subdued as UBS points to slowdown in recent trading

Shares in Wm Morrison Supermarkets (LON:MRW) have fallen into the red in today’s session, as analysts at UBS lowered their price target on the blue-chip grocer, pointing to a slowdown in recent trading. The comments come ahead of the grocer’s update next Tuesday.

As of 13:29 GMT, Morrisons’ share price had given up 1.13 percent to 210.85p, underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.78 percent lower at 6,675.72 points. The group’s shares have given up about 1.4 percent of their value over the past year, as compared with about a 13.2-percent dip in the Footsie.

UBS lowers stance on Morrisons

UBS lowered its price target on Morrisons from 295p to 290p today. Proactive Investors reports that while the analysts had initially expected the grocer’s sales to grow by 1.8 percent in the final quarter of 2019, it has noticed a “slowdown in recent trading” which has led to it cutting that figure to 0.5 percent. The analysts, however, retained their ‘buy’ stance on the shares, arguing that the longer-term investment case remained ‘robust’.

“Current profitability underpins a free cash-covered 6.0% dividend yield and a strong balance sheet helps to protect the downside,” the broker pointed out, as quoted by the newswire. For next week’s update, UBS reckons Morrisons has the ‘toughest comparatives’ of any of the UK’s ‘Big Four’ supermarkets, while the focus will likely be on the performance of its Makes It and The Best own brands.

Other analysts on supermarket

The 14 analysts offering 12-month price targets for Morrisons for the Financial Times have a median target of 252.50p on the shares, with a high estimate of 300.00p and a low estimate of 195.00p. As of December 29, the consensus forecast amongst 19 polled investment analysts covering the blue-chip supermarket advises investors to hold their position in the company.

As of 13:49 GMT, Wednesday, 02 January, Wm. Morrison Supermarkets plc share price is 210.15p.