Bernstein has hiked its valuation on J Sainsbury (LON:SBRY), following the grocer’s latest results. The supermarket recently posted its full-year update which, however, was overshadowed by news of the group’s merger deal with Walmart’s Asda.
Sainsbury’s share price has advanced in London in today’s session, having added 0.47 percent to 306.02p as of 13:33 BST, largely in line with gains in the broader UK market, with the benchmark FTSE 100 index currently standing 0.45 percent higher at 7,745.36 points. The group’s shares have added more than 14 percent to their value over the past year, as compared with a near four-percent gain in the Footsie.
Bernstein hikes valuation
Sanford C. Bernstein, which sees Sainsbury’s as a ‘market perform,’ hiked its valuation on the shares from 250p to 330p yesterday. Proactive Investors reports that the move came after the broker updated its model for the supermarkets group following its recent results, eclipsed by the tie-up deal with Asda.
“Almost unnoticed 10 days ago was the fact that Sainsbury’s published full-year results,” the analysts said in a note, as quoted by the newswire, pointing out that the results had come in very close to their forecasts. The analysts, however, added that they thought there will be small earnings per share upgrades.
Analysts update merger model
Bernstein further updated the merger model, noting that the combination “should warrant a 50% re-rating over time, not the 10% we have seen so far,” and noted that they maintained their market perform rating for now, until they got “more time to dive deeper into the CMA implications of the proposed merger”.
The comments came after new research suggested that at least 73 supermarkets will have to be sold for the Sainsbury-Asda tie-up to be given the go-ahead.