This report is not a personal recommendation and does not take into account your personal circumstances or appetite for risk.
Trade Parameters
Technical Observations – For
Technical Observations – Against
Bullish bounce by shares, confirming resistance turned support. Analysts at HSBC today upgraded the shares to Buy from hold (target increased from 240p to 300p), expecting $900m more special dividends over next 3 years (15% of market value). Analysts at Jefferies (21 Aug) said they expected higher half-year revenue and profit margins in an upbeat interim results in September.
Risks to Morrisons include Brexit impact on food supplies, higher UK interest rates causing a consumer downturn, an equity market rally that favours more risky names (Banks, Miners), 2.7% dividend in bottom third of UK 100 not supportive of share price, poor Kantar monthly grocery data and, of course, broker downgrades.
Brokers/analysts are neutral on the shares, with a consensus target of 258p suggesting downside from from current levels. However, the HSBC upgrade could be followed by others, especially after the latest share price breakout, shifting consensus towards a more bullish stance.
Next Event: Interim Results, 13 Sept (Wednesday); Ex-dividend, 27 Sept
Latest Broker 12-Month Consensus: 28% Buy, 44% Hold, 28% Sell (full breakdown on request)
Source: DowJones Newswires, Reuters News, Bloomberg or Company Press releases
| 1wk | 1m | 3m | 6m | 1yr | 2yr | 3yr | 4yr | 5yr | |
| Perf % | 1.3 | 2.0 | 8.4 | 17.9 | 7.5 | 33.2 | 58.9 | 53.7 | -9.1 |
This research is produced by Accendo Markets Limited. Research produced and disseminated by Accendo Markets is classified as non-independent research, and is therefore a marketing communication. This investment research has not been prepared in accordance with legal requirements designed to promote its independence and it is not subject to the prohibition on dealing ahead of the dissemination of investment research. This research does not constitute a personal recommendation or offer to enter into a transaction or an investment, and is produced and distributed for information purposes only.
Accendo Markets considers opinions and information contained within the research to be valid when published, and gives no warranty as to the investments referred to in this material. The income from the investments referred to may go down as well as up, and investors may realise losses on investments. The past performance of a particular investment is not necessarily a guide to its future performance.
Prepared by Michael van Dulken, Head of Research