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Galloping out of the gates, quickly rising from £2.11 to a to a 2-month-plus peak of £2.46 by the start of February, Morrisons shares have  since seen a gradual waning of confidence, resulting in it briefly ducking under £2.15 for the first time in almost 4 months.

WM Morrison Supermarkets shares now sit at a current trading price of £2.16.

Mid-March’s full year results failed to bring investors back on side, despite there being a lot to recommend. Group like-for-like sales, excluding fuel, jumped 4.8%, close to double the 2.8% increase posted the year previous.

Underlying pre-tax profit rose 8.6% to £406 million – though the statutory figure was down 15.8% in part due to the costs associated with its new warehouse in Erith – while the supermarket also announced a special dividend of 4.0p per share to go alongside the 24.9% rise seen by its ordinary dividend.

However, there was maybe some concern over the slowdown in like-for-like retail sales in Q4. While its wholesale division saw a 3.2% increase, the standard supermarket arm saw just a 0.6% rise, less than half what was posted in Q3, and just shy of a third of the growth seen in the first half of the year.

As for Thursday’s Q1 update, while its wholesale business waits to start supplying 300 more McColl’s stores towards the end of the year, its retail division will be under scrutiny, with investors hoping for an improvement on that disappointing Q4 figure.

WM Morrisons shares have a consensus rating of ‘Hold’ alongside an average target price of £2.49.

This article is brought to you in association with Spreadex. All opinions expressed in this article are from the author and do not necessarily represent the opinions of The Armchair Trader. You can find out more about Spreadex products and services here, or find more articles from Connor Campbell here.

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Connor Campbell

Connor joined Spreadex in 2014 as part of a newly expanded financial analyst team after graduating from the University of Southampton with an MA in English. His focus is on providing Spreadex's customers with up-to-date and informative news, and is responsible for the market analysis found on the Spreadex website.

Connor produces three daily market updates, a daily stock earnings preview, a weekly financial market preview piece every Friday, a round-up of all the big financial stories making the weekend press every Monday morning and regular stock market features.

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