Will shares in Morrisons go up?

WM Morrison (MRW)

Morrison WM Supermarkets (-)

Will shares in WM Morrison fall towards the lows of 140p or rally on towards the channel ceiling at 215p?

The oft-overlooked Morrisons quickly re-entered the UK 100 at the last index re-shuffle, having found itself demoted to the towards the end of 2015. A sterling recovery in share price this year is currently taking a break with shares currently testing the 100-day moving average. This looks to be potential consolidation within a bullish flag pattern ahead of another leg higher and a re-visit of the channel ceiling around 215p. Bulls will no doubt be seeking confirmation that a major reversal is not in play by looking for a break above 200p.

While today MRW’s fundamentals are on a similar par with Tesco, over the next few years it is seen edging back towards our sector average price in terms of P/E ratio.

Brokers are bearish on Morrisons with 52% having issued ‘Sell’ ratings on the stock in 2016. Jefferies sought 10% upside in May with a 210p target price, while the average 12-month target is suggesting 9% downside potential.

N.B. All pricing and consensus data was sourced from Bloomberg on 6 June. Please contact us for a full rundown.

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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.

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