Sainsbury's checked out by Jefferies, which cuts target

An early look at some City analyst views on Monday morning

Sainsbury's and other big supermarkets under the spotlight today

Ahead of results on Wednesday, US house Jefferies has checked out supermarket titan J Sainsbury plc (LON:SBRY) and cut the target price by 30 pence to 250p.

According to the last update from Kantar, Sainsbury’s market share last month declined by 0.2 percentage points to 15.9% as it struggles, along with the other big three, against the discounters.

But it is the integration of Argos that catches Jefferies' attention, which rates shares as 'hold'.

"We remain unsure if Argos will prove a longer term lift to JS' store economics, or whether it risks becoming an incremental distraction to a challenged core business," said analyst James Grzinic.

He notes that, on one hand, it has successfully accelerated non-food growth but the store's food performance looks to have been on a deteriorating trend in 2016.

The broker also reckons that UK consumer outlook may represent an incremental challenge in the months ahead.

Investment bank Credit Suisse also looks at the stock today, but is far more upbeat. It repeats an 'outperform' stance and pumps up the target price to 315p from 290p.

The same broker also lifts Tesco's (LON:TSCO) target price to 130p from 115p  and repeats an 'underperform' stance. Morrison's (LON:MRW) is rated 'neutral' by the broker, but it lifts the target to 20 p to 200p.

Speaking of shops, what about online?  N Brown Group plc (LON:BWNG), the web fashion retailer is downgraded today by HSBC to 'hold' from 'buy'.

Meanwhile, heavyweight Goldman Sachs gets its teeth into the banking sector, and downgrades Lloyds Banking Group (LON:LLOY) down to 'sell;' from 'neutral' and  moves challenger bank Metro (LON:MTRO) down to 'sell' also from 'neutral' previously.

Advertising heavyweight WPP group (LON:WPP)  has its target moved down to 1820p from 1850p previously by Jefferies.

Add related topics to MyProactive

Create your account: sign up and get ahead on news and events


The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is...



Full interview: Emmerson Resources discusses recent diamond drilling...

Emmerson Resources Ltd (ASX:ERM) managing director and CEO Rob Bills updates Proactive on the first diamond drilling activities at the Whatling Hill Project in NSW.  A 1,500-metre reverse circulation (RC) and diamond drilling program is targeting an interpreted porphyry copper-gold...

23 hours, 24 minutes ago

2 min read