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(Sharecast News) - Analysts at Jefferies downgraded supermarket giant Sainsbury's from 'buy' to 'hold' on Monday, stating that while they remained "upbeat" on UK grocers, there appeared to be better value elsewhere.
Jefferies said positive forecast momentum and outsized initial Covid-19 concerns had helped Sainsbury's over 50% UK sector outperformance over the past nine months.
However, the analysts noted that the Argos-driven earnings upgrades had "largely run their course", with Sainsbury's now on an eight-year price-to-earnings "relative peak" and a 26% premium on a foreign currency basis.
"We remain upbeat on UK food retailers as we reflect on near trough valuations at a time of strong mid-term earnings visibility (with 22/23 benefitting from a full Covid costs recovery and profit pools rebuild), as encapsulated by peak real yields offered by Tesco/WM Morrison relative to 10yr Gilts," said Jefferies, which kept its 280.0p price target on the stock unchanged.
4 Apr 2024 08:10
Britain's Co-op profit slides after petrol forecourt sale
April 4 (Reuters) - Co-op, which runs Britain's seventh-biggest supermarket chain, posted a steep drop in annual pretax profit on Thursday following the sale of its petrol forecourt business, and amid growing competition among retailers.
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