Broker snap: Credit Suisse downgrades Morrisons

11th Oct 2012 09:52

Credit Suisse has cut its target price for Morrisons supermarket to 290p from 320p, downgrading it from 'Outperform' to 'Neutral'.Analysts at the Swiss Bank said that after weak first half sales, they thought that Morrisons needed to get back on form, but it hasn't. "It appears to us that Morrisons' marketing, promotions and in-store execution are currently not sharp enough. We still hope this is a temporary loss of form and not a longer-term strategic issue."The broker is thus reducing its target price following cuts to its full year earnings estimates by 2%-3% and a less optimistic long-term margin outlook. Credit Suisse analysts conclude: "We still think Morrisons can deliver a solid full year profit performance, even given weak like for like, but it needs some sales momentum. Meantime, although it does not look high-rated at 9.4 times 2013/14 estimated price earnings, we do not expect it to outperform near-term and cut our rating from Neutral to Outperform."In early morning trade Morrisons was down, approaching year lows.