Shares in WM Morrison fall 1.3 percent, topping the FTSE 100fallers list, after Credit Suisse reduces its rating for Britain's No. 4 grocerto "neutral" from "outperform" on valuation grounds, according to traders.
Credit Suisse also cuts its earnings estimates for Morrison by up to 3percent and lowers its target price to 290 pence from 320 pence.
"After weak H1 12/13 sales, we thought Morrison needed to get back on form.It has not yet," the broker says in a note.
"The loss of form, initially we thought mostly due to weak tradingconditions, more competitor coupons, and Netto conversions, has continued. Itappears to us that Morrison's marketing, promotions and in-store execution arecurrently not sharp enough. We still hope this is a temporary loss of form andnot a longer-term strategic issue," the bank adds.
Morrison's market implied 5-year compound annual growth rate is minus 3percent, worse than Sainsbury but faring better than the UK's no.1retailer Tesco on minus 11.3 percent, according to Thomson ReutersStarmine data.
Credit Suisse says although Morrison does not look high-rated on a 12-monthforward price-to-earnings of 9.4 times, which is 37 percent below its historicalaverage, it does not expect it to outperform near-term.
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