Trim and discard discolored stem ends from morels. Submerge mushrooms in a bowl of cool water and gently agitate with your hands to loosen any dirt. Drain, rinse thoroughly under running water, and gently pat dry. Cut mushrooms in half lengthwise (if using cremini mushrooms, cut into quarters).
In a 10- to 12-inch frying pan over medium heat, melt butter. Add shallots and garlic and stir often until limp, about 5 minutes. Add mushrooms and stir often until juices released by mushrooms have evaporated, 5 to 6 minutes.
Add sherry and increase heat to medium-high. Boil until sherry is reduced by about half, about 3 minutes. Add cream and boil, stirring occasionally, until sauce thickly coats mushrooms and is reduced by about two-thirds, 4 to 5 minutes.
Spoon mushroom mixture into a shallow 3- to 4-cup ceramic baking dish. Sprinkle top evenly with cheese. Broil 4 to 6 inches from heat until cheese is melted and bubbling, about 2 minutes. Serve with toasted bread slices.