ANALYST VIEWS: IS THERE ANYTHING TO FEAR IN SAINSBURY’S RESULTS?
CLIVE BLACK | SHORE CAPITAL
Its recent de-rating was broadly justified as its outperformance against the pack had ended. But performance convergence at a time of material capital investment must be a growing cause for concern. It needs a stronger momentum if margins are to build and returns grow to justify its capital expenditure.
DAVE MCCARTHY | EVOLUTION SECURITIES
Like for like growth was slightly behind our forecast but we are not greatly concerned given the effects of the bank holidays. Sainsbury’s trades in line with the sector, but we believe its model is higher risk than its competitors, highlighted by the poor free cash generation and dividend paid out of debt.
RICHARD HUNTER | HARGREAVES LANSDOWN
The update narrowly missed estimates but Sainsbury’s was noticeably upbeat. Its reliance on the UK and the remaining Qatari stake are issues investors cannot ignore. Its share price has reflected this discomfort, falling 13 per cent in the past six months compared with a one per cent fall in the FTSE 100.