Sales growth at J Sainsbury was still faster than peers and, according to HSBC the second quarter confirmed Sainsbury’s is growing faster than the industry but margin enhancement looks fairly limited for the full year. The broker believes valuation is currently stretched relative to the sector and reiterates its “neutral” rating.
Morgan Stanley reiterates its “overweight” rating and 2,270p price target on Imperial Tobacco saying the market is underestimating the cigarette maker’s organic growth prospects. Says its 22 per cent discount to peers, based on the fact the shares are trading at just 10.5 times 2010 earnings, is “unjustified”.
Despite a 17 per cent de-rating over the past six months, JP Morgan Cazenove believes interest in Veolia remains low after a disappointing set of first half results. The broker does not see the third quarter as a positive catalyst for the stock and retains an “underweight” stance, with a slight preference for Suez Environnement.