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Sainsbury’s share price: Analysts say management is reassuring investors

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Interactive Investors argues that J Sainsbury (LON:SBRY) is making the most of its Argos acquisition and despite nerves around the deal with Walmart’s Asda, management is ‘reassuring’ investors, Citywire reports. The comments came after the FTSE 100 group posted its results yesterday, revealing a rise in sales for the first half of its financial year, while noting that its profits had been weighed down by the integration of Argos and the proposed merger with Asda.

Sainsbury’s share price rose in the previous session as investors digested the results, gaining 1.54 percent to close at 324.00p. The stock outperformed the broader UK market, with the benchmark FTSE 100 index adding 23.40 points to close 0.33 percent higher at 7,140.68. The shares have extended gains in early morning trade, changing hands 0.90 percent higher, as compared with a 0.54-percent dip in the Footsie. 

Interactive Investor weighs in on Sainsbury’s

Citywire quoted Interactive Investor’s analyst Lee Wild as commenting yesterday that  opening Argos stores in Sainsbury’s supermarkets was ‘working well’ but there was scant detail on the merger with Asda, which is being considered by regulator.

The analyst added that the proposed merger with Asda was ‘a real game-changer for the industry,’ and that the FTSE 100 grocer’s team had “made a success of the Argos acquisition and stand a good chance of pulling off this much larger deal”.

“Sainsbury’s admits that consumer uncertainty will make the crucial second-half difficult, and that clothing is fiercely competitive,” Wild continued, saying, however, that Sainsbury’s “confidence in meeting forecasts for underlying full-year profit of £634 million is reassuring”.

Other analysts on blue-chip supermarket

Kepler Capital Markets reaffirmed Sainsbury’s as a ‘buy’ yesterday, without specifying a price target on the shares. According to MarketBeat, the blue-chip supermarket currently has a consensus ‘hold’ rating and an average price target of 310.69p.

As of 08:10 GMT, Friday, 09 November, J Sainsbury plc share price is 242.10p.

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