Morrisons share price: where next ahead of its H1 results?

The British supermarket chain will unveil its half-year results on 10 September, with investors eager for an update on its performance to give an indicator of how it will emerge from the coronavirus pandemic.

  • Morrisons set to unveil its half-year (H1) results on 10 September
  • The British supermarket chain is ready to battle it out in upcoming autumn price war
  • Morrisons expands partnership deal with Amazon

Morrisons shares have remained relatively resilient amid the coronavirus pandemic, with the stock just 5% down year-to-date, while first quarter (Q1) sales climbed 5.7% despite the ‘highly volatile’ trading environment.

However. the direction of the British supermarket chain’s share price will be determined by its upcoming half-year (H1) results on 10 September, with investors eager for an update on the company’s performance amid a myriad of challenges.

‘We are facing into the unprecedented current challenges and are playing our full part to help feed the nation: working with determination, creativity and pace to serve customers as well as we possibly can,’ Morrisons CEO David Potts said in its Q1 trading update.

Morrisons readies itself for Autumn price war

Morrisons, along with its rivals, is gearing up to reduce prices on hundreds of its products as the sector gets ready for an Autumn price war.

The British supermarket chain said that it plans to cut prices on various products by as much as 23% on average, with many of its rivals embarking on similar cost-cutting measures in a bid to attract consumers in need of cheaper food items amid the economic fallout of Covid-19.

Barclays believes Morrisons share price is fair value

Analysts at Barclays believe Morrisons share price is trading close to fair value, with the bank reiterating its ‘underweight’ rating and issuing a target price of 196p per share.

Based on the Morrisons closing at 192p per share, Barclays assessment implies a potential upside of just 2%.

Morrisons expands grocery deal with Amazon

Over the long-term, Morrisons deal with Amazon could help drive sales at the supermarket chain, with the pair recently expanding their partnership to cover its full range of products.

The supermarket chain's products already appear on Amazon’s ‘Fresh’ and ‘Prime Now’ services, but the extended partnership it will allow shoppers to get all their items delivered, with an initial trial beginning in Leeds.

‘For Morrison we see this development as a complementary move that deepens its online penetration of the UK online grocery market in a capital light manner,’ analysts at Shore Capital said in a note.

‘In particular, it potentially expands the reach of the brand to households where there have not been traditional Morrison shoppers perhaps, most notably maybe in relatively under-represented postcodes in Great Britain.’

‘As such, we see this further move with Amazon as being largely incremental to the group's current offline and operations too,’ Shore Capital added.

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