Morgans has rated diversified supermarket giant Wesfarmers Ltd (ASX: WES) as a hold after the release of "slightly better" than expected March quarter results.
Strong like-for-like sales growth of 7.7% out of Bunnings Australasia, and Coles sales growth of 1.3% impressed the broker enough to suggest shareholders hold onto their Wesfarmers shares for now.
As expected, Bunnings UK & Ireland produced sales falls of 15.4% despite efforts by Wesfarmers to refine its offerings and the Morgans broker says the flailing business is still a long way from where it needs to be to justify its continuation by Wesfarmers.
Morgans raised its price target on Wesfarmers from $44.65 to $44.74.
Elsewhere in the supermarket sector grocery distributor Metcash Limited (ASX: MTS) has been kicking goals, with its share price up 63% from its $2.19 price at this time last year to an May 1 close of $3.58.
Woolworths Group Ltd (ASX: WOW) hit a 52-week high on April 30, closing down slightly at $27.74 on May 1 with improved investor sentiment after Deutsche Bank put a buy rating and a $30 price target on the Wesfarmers competitor.
