Exane BNP Paribas has upgraded supermarket group Morrisons (LON:MRW) to 'neutral' from 'underperform' after admitting that it "got it wrong".
It said: "We have a positive stance on the UK food retailers but thought that Morrisons would need to reinvest nearly its entire cost savings.
"We are no longer convinced that's the case. Morrisons is a business burdened by paperwork; it damages the shopping experience and adds costs and complexity. We think their relatively new management team can continue to lift the burden, improve the retail, stay sharp on price and deliver some margin accretion."
Analysts upped their target price on the stock to 200 pence a share (from 165 pence).
Separately, Societe Generale repeated its 'sell' call but increased its target price to 170 pence (from 150 pence).
Meanwhile, Barclays Capital remained similarly downbeat and reaffirmed its existing 'underweight' rating, lifting its target to 190 pence (from 165 pence).
Equity research analysts at the bank said: "With sales, profits and cash better than we expected, it is hard to be anything other than complimentary about Morrison's 1H. However, we need to consider what happens next rather than looking backwards."
At 2:53pm: (LON:MRW) Morrison Wm Supermarkets PLC share price was +4.25p at 212.35p