Morrisons (first-half earnings 14 September)
Long regarded as the poor relation of UK listed supermarkets, Morrisons decision to sell through Amazon proved wise, and notparticularly capital intensive. Recreating the Safeway brand also provides the firm with a way of tapping into the convenience store market, something that has been closed to Morrisons in recent years. However, a forward PE of 20.6 and a lower dividend yield than for sector peers (2.2% versus 3.7%) reduces the attraction somewhat. Earnings are expected to be 0.05p per share, up 14% year-on-year, while revenue is expected to be £8.3 billion, up 4.6%.
The rally from the 2015 lows has run out of steam around 250p, but it has yet to break to the downside. Above 250p, the price will then look to the 2012/2013 peaks around 300p. A drop below 230p would represent a trend-break, with the possibility of longer-term declines.
JD Wetherspoon (full-year earnings 15 September)
A recent warning from Greene King has put all pub shares, including Wetherspoon's, under the microscope, with worries that the consumer slowdown is gathering pace. Investors will be watching for signs of weakness, which could see the shares suffer if they miss forecasts. Earnings are expected to rise 29% to 0.62p per share, while revenue edges 2.2% higher to £1.6 billion. Weatherspoon’s has beaten forecasts for eight of the last reporting periods, so a disappointment could sully the steady rally over the past two years.
Shares in JD Wetherspoon have climbed steadily over the past 18 months, but the latest dip does raise the prospect of a turnaround. However, for now it looks like a dip in the trend that may well be followed by further buying, with an aiming of moving back to the 2017 high of £11. A break of 960p would mark a bearish development.