Hargreaves Lansdown argues that Sainsbury’s (LON:SBRY) first-quarter update shows the impact of the supermarket price war, Citywire reports. The comments came after the blue-chip grocer reported yesterday that its sales growth had slowed in the first three months of its financial year.
Sainsbury’s share price, however, surged in the previous session, as the group’s sales nevertheless beating analyst estimates. The shares closed 31.41 percent higher at 328.00p, outperforming the broader UK market, with the benchmark FTSE 100 index shedding 20.20 points to end the session 0.27 percent lower at 7,573.09 points.
HL weighs in on grocer’s results
Citywire quoted Hargreaves Lansdown analyst Laith Khalaf as commenting yesterday that Sainsbury’s first-quarter update showed he impact of the supermarket price war but also signalled the City’s enthusiasm for its proposed merger with Asda.
“Conditions remain challenging though, and while the top line is just about growing, Sainsbury’s efforts to lower prices mean that may not entirely feed through into profits,” Khalaf pointed out, as quoted by the newswire.
Shore Capital downgraded its rating on Sainsbury’s to ‘hold’ yesterday, without specifying a price target on the shares. According to MarketBeat, the blue-chip grocer currently has a consensus ‘hold’ rating and an average price target of 310.69p.
Sainsbury’s boss defends Asda merger
The Times separately quoted Sainsbury’s chief executive Mike Coupe as defending the group’s proposed acquisition of Asda, after facing criticism that the tie-up was distracting the management from the running of the day-to-day business.
“I would absolutely refute that. I don’t agree with the premise,” Coupe said, adding that his planned takeover was “not a distraction”.