Market's view on Sainsbury's
Published on April 2024
- Sainsbury’s recent £200 million share buyback included over £20 million in fees, effectively reducing its overall value and potentially impacting its share price negatively.
- Queries are raised about the impact of the share buyback on Sainsbury’s share price, questioning whether it will lead to an increase.
- The CEO of Sainsbury’s predicts an increase in shopper spending, although expensive items like TVs and sofas might only see increased sales with a cut in interest rates. The outlook for general merchandise remains cautious due to high household costs.
- Technical issues with Sainsbury’s payment provider rendered their website temporarily unavailable.
- Jefferies maintains a positive outlook for Sainsbury’s with a profit forecast for 2024/2025 between £690 million and £765 million, citing potential for market share gains and margin expansion. A buy recommendation with a 300p price target is reiterated.
- Sainsbury’s experienced technical difficulties causing online order failures, which were addressed by offering affected customers a £20 evoucher as compensation.
- Shore Capital comments on Sainsbury’s, noting a potential ease in volume momentum and expressing concerns about the value derived from the acquisition of Argos, suggesting it was more about empire building than value creation.
- Discussions about the fees associated with share buybacks reference other companies as examples, querying the fees paid by Sainsbury’s.
- General dissatisfaction is noted regarding Sainsbury’s dividend policy, indicating perceived poor performance, especially in non-food sectors.