LONDON (ShareCast) - Unfavourable broker coverage helped send shares in the supermarket operator Wm Morrison down for the second day running Friday.
Citigroup lowered its target price on Wm Morrison to 320p from 375p, despite the company reporting an 18.5% rise in first half underlying pre-tax profits.
The results also failed to impress Cazenove, which focused on what it saw as ‘relatively muted operational gearing’, while retaining its ‘outperform’ rating and 274p target price on the firm.
JP Morgan has lowered its target price on Home Retail Group by 11p to 224p following the retailer’s fall in like-for-like sales over the second quarter.
Home Retail said yesterday that same store sales were down by 5.8% from the same quarter last year at catalogue-based retailer Argos and by 8.3% at home and garden products-specialist Homebase.
“Sales were disappointing at both Argos and Homebase, giving clear evidence that UK consumption lurched downwards in the past two months,” the broker said.
“However, given that savings rates have barely moved, we expect worse to come.”
JPM keeps its ‘underweight’ rating on Home Retail.
Home Retail Group also saw its target price cut to 190p from 210p at Citigroup, which maintains its ‘sell’ stance on the group.
Slowing UK and US housing markets prompted Citigroup to lower its recommendation on the building materials group Wolseley to ‘sell’ from ‘buy’.
“While the building distribution market looks attractive over the longer term, we believe the market may have got too far ahead of the curve in this case with the next 12 months or so set to be more challenging than perhaps the market is expecting," the broker said.
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