Broker snap: Tesco, Morrison boosted by Exane upgrade

10th Jul 2013 17:28

Share prices of rival supermarket chains Tesco and Morrison received a boost on Wednesday after Exane BNP Paribas raised its ratings for both stocks.Tesco was 1.72% higher at 349.5p in afternoon trade after Exane upgraded the company from 'neutral' to 'outperform' and named it as its "favoured make-up artist" as retailers attempt to increase the appeal of their stores."The shopper, the CEO and the investor are aware that large grocery stores have reduced appeal -'The curse of the mass-merchant' - so we look at what retailers are doing to retain relevance," the broker said."The issues are structural so multiples are likely to remain suppressed. Some retailers are responding much quicker than others, adding a veneer of make-up, with Tesco looking attractive."Exane said that the company is moving quickly to "refresh its offer", make hypermarkets more relevant and improve its brand.Meanwhile, Morrison has been upgraded from 'underperform' to 'neutral, lifting shares by 1.44% to 282p. The broker said the move was due to a better macro outlook and greater margin resilience.Sainsbury however was trading in the red, down 0.64% at 373.8p after being left at 'underperform'.BC