The week ahead: Morrisons, JD Sports

There’s plenty of action pencilled in for the next few days, with recovering supermarket Morrisons and JD Sports likely to grab headlines.

Monday 11 September

Trading Statements

XLMedia, Crossrider, Deltex Medical, EKF Diagnostics, Be Heard Group, Cloudcall, John Laing Infrastructure Fund

AGM/EGM

Real Estate Credit Investments

Tuesday 12 September

High street sports fashion retailer JD Sports (JD.) serves up first-half results, having lost 30% of its value over the summer months.

JD has typically done better during the winter, and has been a winning constituent of Interactive Investor’s Winter Portfolios, but it’s been much harder recently.

A lot of it’s down to margin pressure, which is a valid concern, according to analysts at Barclays. But worries about any read-across from poor results at Foot Locker are wide of the mark.

“We don’t expect meaningful surprises on the downside,” says Barclays. “More importantly, our longer-term thesis remains intact: we believe JD Sports is positioned to grow well above the market, driven by an international store rollout, strong brand relationships, benefits of scale and positive structural trends in athleisure.

“In our view, the recent sell-off provides a favourable entry point for a strong and consistent growth story and we reiterate our ‘overweight’ rating.”

Trading Statements

Goals Soccer Centres, Smart Metering Systems, Futura Medical, Hydrogen Group, TyraTech, Empiric Student Property, Ashtead, TP Group, Applegreen, InnovaDerma, Tasty, Servelec, Flowtech Fluidpower, Vernalis, JD Sports

AGM/EGM

Van Elle Holdings, Emmerson, SuperGroup

Wednesday 13 September

Trading Statements

Wilmington, SQS Software Quality Systems, Sigmaroc, Surgical Innovations Group, Advanced Medical Solutions Group, TEG Group, Alliance Pharma, SOCO International, Town Centre Securities, Just Group, Gaming Realms, Sigmaroc, Columbus Energy Resources, Ingenta

AGM/EGM

Argo Group, Versarien

Thursday 14 September

Shares in the Morrisons (MRW) supermarket chain are up 26% in the past 12 months and 79% since late 2015, easily outperforming rivals Tesco (TSCO) and Sainsbury's (SBRY).

But there’s a feeling further progress will be hard won. “The investment case is balanced, in our view,” writes UBS. “Morrisons faces intense competitive pressure from discounters Aldi & Lidl and our analysis suggests it is losing loyal customers.”

An improved range is boosting sales, and there’s more self-help coming through. But it’s difficult to quantify, and there are other concerns. “With top-line volumes slowing, the stock could become vulnerable absent clearer guidance,” warns UBS, which repeats its ‘neutral’ rating and 250p price target.

The broker looks for operating profit of £215 million – 2.6% margin – pre-tax profit of £172 million, which is about £4 million under consensus, and net profit of £132 million.

Like-for-like sales are tipped to grow 2.9% in the second quarter versus 3.4% in Q1 and 2.1% a year ago.  

Trading statements

Warpaint London, Gresham House, Corero Network Security, Forbidden Technologies, GVC Holdings, Property Franchise Group, Safestore Holdings, Booker Group, Spire Healthcare, Regional REIT, MW Morrisons

AGM/EGM

Abzena, Falcon Oil & Gas

Friday 15 September

AGM/EGM

Blenheim Natural Resources

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

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