Morrison did not warn as some feared. That said, "we think the company remains cautious, and we are adopting a similar tone with both our estimates and target price," analysts at Credit Suisse wrote on Tuesday.

Weak Christmas/New Year ex-fuel like-for-like (LFL) sales of -2.5% were disappointing although not unexpected, they added.

Thus the key is now whether the company will be successful in its stated goals of promoting innovation and communicating better its key points of difference, with a new advertising campaign to be launched in February.

"Yet the fact remains that Morrison still expects 2013 to be tough, that it has deferred (understandably) most initiative updates until the fiscal year results in March, and, we thought, adopted a generally cautious tone throughout the press release/analyst call," the broker explained.

For that reason Credit Suisse decided to opt for a more cautious stance, rather than assume some like-for-like (LFL) sales/margin recovery as it had before.

This had a fairly big impact on profit before tax (PBT)/ earnings per share (EPS) estimates for 2013 and 2014, lowering them by 6%. Nevertheless, that meant that these analysts' numbers had now come down from top-end to more in-line with consensus.

The target price fell from 280p to 265p, in-line with the above revisions, although the recommendation on the grocer's shares remains neutral.

AB

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