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.
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