Morrisons (LON:MRW) was the centre of attention on Wednesday in a quiet day in the world of the brokers.
Exane BNP Paribas upgraded the stock to ‘market perform’ from ‘underperform’, while Bernstein moved the company to ‘neutral’ from ‘underperform’.
Morrisons released its interims yesterday which revealed that profits rose 13.5% to 143mln in the first half of the year.
That marked its first increase in half-year profits for four years.
In the first line of today's note Exane BNP conceded "we got it wrong" about Morrisons.
It added that the "relatively new management team can continue to lift the burden, improve the retail, stay sharp on price and deliver some amrgin acceleration".
On top of the solid profit growth, Morrisons – one of the ‘Big Four’ UK supermarkets – assured investors that it had seen “no negative impact” since the referendum.
Barclays said it is “hard to be anything other than complimentary” about Morrisons first half result, although it did caution that the second half posed more challenges.
It says the supermarket will face tougher competition towards the end of this year as Asda in particular looks to mitigate its like-for-like sales decline.
The bank added that sales benefit Morrisons has received from store closures will soon dissipate.
Similarly, HSBC analyst David McCarthy praised the company but also highlighted potential sticking points that may arise in the coming months.
“There is no question that the strong management team at Morrisons is producing good results,” said McCarthy in a note today.
“Like-for-likes are stronger, cash generation is better than expected and 11% profit growth is to be applauded in this market.”
McCarthy thinks a “major price move” by Asda could be forthcoming which and said he remains on the outlook for the industry as a whole.
HSBC maintained its ‘reduce’ recommendation and its target price of 135p, well the current price of 211p.
Elsewhere, insurer Admiral Group PLC (LON:ADM) had its ‘hold’ recommendation repeated by Berenberg, although the bank did up its price target for the stock to 1804p from 657p.
JP Morgan Cazenove retained its ‘overweight’ rating for online fashion store ASOS Plc (LON:ASC) but moved its share price target up almost 19% to 5400p.
Deutsche Bank was still bearish about telecoms giant BT Group Plc (LON:BT.A), reiterating its ‘sell’ recommendation and lowering its share price target by 20p to 370p.