Deutsche Bank has removed supermarket group William Morrison (LON:MRW) from its list of stocks to avoid and moved to a 'hold' rating (previously 'sell') in a note to investors today.
Analysts have upped their 2016 and 2017 earnings per share estimates by 9 per cent and their target price by 20 per cent to 200 pence.
The broker commented: "With just 6% downside to our higher TP and a 3% div yield, we upgrade to Hold.
"We continue to see a recovery at Asda as a threat to Morrisons' profitability but we factor in 50bps of EBIT margin decline to reflect expected net investment."
Meanwhile, Exane BNP Paribas upgraded MRW to 'neutral' (from 'underperform') after admitting that it "got it wrong", in its note on the stock on Friday.
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).
At 2:25pm: (LON:MRW) Morrison Wm Supermarkets PLC share price was +4.85p at 216.45p