FTSE Falls, Sainsbury’s Grocery Business Reversal Leads to Earnings Upgrades

Sainsbury’s Grocery Business Reversal Leads to Earnings Upgrades

Sainsbury’s 1Q confirms the relevance of the core grocery and Argos businesses in the U.K., Jefferies says. The U.K. grocer’s reversal in the grocery business was more gradual than expected, leading to mid-single-digit earnings upgrades by Jefferies. The company is more confident with full-year earnings delivery and underlying pretax profit guidance for fiscal 2022 of at least GBP660 million compares with consensus of GBP630 million, the U.S. bank says. “This is all encouraging news but we still see better value on offer at Tesco as the sector comes to the fore of investors’ attention,” the bank says. Jefferies rates the stock buy, with a 280 pence target price.

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