Amazon Target Morrisons Upgraded by Analysts

Morningstar analysts have raised their fair value for the FTSE 100's supermarket, but they believe the company is a target for US giant Amazon

Ioannis Pontikis 14 September, 2018 | 10:01AM

Morrisons supermarket

Morningstar analysts have upgraded their fair value estimate for FTSE 100 supermarket Wm Morrison (MRW) after half-year results showed a near-5% rise in like-for-like sales in the last six months.

We are increasing our fair value estimate to 208p per share from 202p to reflect higher retail growth for the 2019 financial year, but we still view the shares as overvalued. We think the shares, at almost 20 times 2019 earnings versus 17 times for Tesco (TSCO) and 16 times for Sainsbury's (SBRY), are still expensive and reflect the likelihood of Morrisons being an acquisition target for Amazon (AMZN).

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Amazon.com Inc3,148.02 USD-0.41
Morrison (Wm) Supermarkets PLC195.30 GBX-0.48
Sainsbury (J) PLC189.85 GBX-0.78
Tesco PLC228.00 GBX-0.39

About Author

Ioannis Pontikis  is an Equity Analyst for Morningstar

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