||ORD 28 4/7P
||EPS - Basic
||Market Cap (m)
|Food & Drug Retailers
Sainsbury Share Discussion Threads
Showing 20626 to 20648 of 20650 messages
|top of range... back to 220?|
|J Sainsbury was on the back foot on Thursday as HSBC reiterated a 'reduce' rating but raised its target price to 205p from 185p following the supermarket's third quarter trading update.
HSBC said the total sales and Sainsbury's sales growth were broadly in line with expectations. "The surprise was 4% LFL growth from Argos vs consensus of 1% and came despite disruption and increased competition," the bank said.
While Argos did well, HSBC stressed that the core supermarket chain is key and remains under pressure.
The bank also warned that Sainsbury's faces further competition from its recovering rival Tesco.
"As Tesco continues to recover it is likely to win more sales back from Sainsbury than any other retailer. Sainsbury lacks scale compared to Tesco and will find it harder to compete as Tesco utilises its scale more effectively," HSBC said.
"We continue to believe that in the long term Argos is in a weak position and will prove a distraction to the core business. Sainsbury needs a strong food business."
HSBC updated its forecasts on pre-tax profits for fiscal year 2016/17 to £570m from £560m to reflect Sainsbury's guidance of £573m. The bank raised its target price to 205p from 185p to reflect the profit increase and a reduction in the beta, a measure of volatility, to 1.3 from 1.5.
Goldman’s has reiterated its ‘sell’ recommendation, citing perceived gross margin pressure at recently acquired Argos and the supermarket chain's own caution on the state of the market, once everyone sobers up from the Christmas bingeing and goes on a diet.
Sainsbury’s management said it remained comfortable with the consensus forecast for current fiscal year profit before tax of £573mln, whereas Goldman believes the top-line performance at Argos should have led to upgrades in earnings before interest and tax of £10mln to £20mln; the fact that guidance was not lifted suggests sales have come at the cost of margins.
Goldman moved its below consensus profit before tax forecast of £558mln up to £567mln, reflecting slight better-than-forecast sales.
As for the outlook, Goldman noted management's concerns over sterling’s collapse and how this might feed through to inflation. This adds weight to Goldman’s view that recent market data, covering the abnormal Christmas period, might have overstated the underlying strength of the sector.
It will be waiting for the next release of industry data from market research group Kantar on 7 February to get a clearer picture of the sector’s well-being.
“Though not Sainsbury specific, in our opinion this will be negative for sector sentiment and thus Sainsbury. Further, as we have previously written we think inflation will be difficult to pass through, and with lower cost savings than peers, SBRY will see the most negative margin impact,” Goldman’s retail team said.
Notwithstanding the enduring caution, Goldman has grudgingly raised its 12-month target price from 195p to 200p.
Shares in J Sainsbury plc broke through the £2.75 mark on Wednesday after it posted like-for-like sales growth of 0.1%, before sliding lower later that day.
The fall didn’t comes as a surprise to technical analyst Zak Mir who says the stock is stuck in a range and is unlikely to top £2.70 again for a little while.
“It looks as though there’s a line of resistance just around the £2.70 mark.”
“The risk now is for a return back towards the trading range of £2.30 to £2.70 while the market digests exactly what the fundamental position of Sainsbury’s is.”|
|will they buy a drone company next to keep up with amazon?|
|Such a dog stock really if it wasn't for the dividend i'd of dumped yesterday.|
|back to 220?|
|sainsburys can never compete with amazon. they are loonies.|
|previous numbers were Q1(0.8) Q2(1.1)|
|No reason not to. Assume you don't. Why not?|
|LFL of +0.1% ! that is very handy isnt it? but do you believe it?|
|I guess the gradual wind down of 'Argos in Homebase' is countering the new 'Argos in Sainsburys' outlets
Plus there will be a gradual wind down of the Original Argos estate, as leases expire and poorly located/performing stores are terminated.|
|On the plus side the Argos 4% like for like was good
However I find it odd that Argos 'Total" sales growth was only 4.1%
Where is the benefit of the new argos outlets ?|
|3 points to bear in mind while everyone is in la la land today :)
Christmas day fell on the best possible day for retailers this year
Sainsbury have not made any changes to margin or profit guidance (unlike MRW yesterday)
ALL retailers still face the same issues in regard to the weak pound and mandatory min wage increases up to 2020|
|Russ Mould, investment director at AJ Bell:
´Investors were likely to be relieved by the strong showing.
'It is still early days - and for those who believe that life begins to the left of the decimal point, a 0.1% increase in like-for-like sales at the supermarket operation is no big deal - but at least Sainsbury's is generating some positive momentum,' he said.
'This is a welcome change - Sainsbury's even cut its interim dividend from 4p to 3.6p back in the autumn - and it may be enough to stir interest from investors, especially as the company is one of the battalion of domestically-focused stocks which have largely been ignored by the post-Brexit market rally.'|
|Great post, Loganair|
|IC - As the Christmas updates start flooding in, it's more good news for grocery. J Sainsbury (SBRY) beat market expectations to report a 1 per cent rise in underlying sales. A lot of that is down to the like-for-like sales performance from recently acquired Argos, which reported a 4 per cent improvement in sales on that basis. That said, alone, Sainsbury's was able to get underlying sales back into positive territory up 0.1 per cent, compared with a 0.4 per cent decline this time last year.
David Alexander, Senior Analyst at Verdict Retail:
"Sainsbury’s premium ranges appear to have hit the right note over a Christmas during which grocery shoppers across the board seem to have shown a willingness to splash out. Its approach to channels is something that Sainsbury’s really does do well, reflected in strong performances from online and convenience. […] While Sainsbury’s more buoyant numbers should be qualified by the context of widespread festive cheer in the grocery market, turnarounds do not generally happen overnight and the signs are there that it is beginning to hit the right notes again. The challenge will be to continue to emphasise its points of difference, but with Argos on board, it may just have found its trump card."
Bruno Monteyne, Bernstein Research:
"This is a very solid Sainsbury's trade update. At first glance it may seem below Morrisons (and probably Tesco tomorrow) two explain this: (1) Sainsbury's Q3 is a 15 week quarter (containing Christmas) rather than a shorter Christmas period as reported by Morrisons (9 weeks) and Tesco (6 weeks). Therefore the Christmas bumper sales has less of an impact. (2) Sainsbury's has performed the best of the big-4 over a longer 2 or 3 year period so they don't have the benefit of easy comparatives."
Barclays European Food Retail Equity Research:
"Clearly these numbers are both nicely ahead of expectations. Unlike Morrison yesterday, the company makes no comment on its profit expectations, which suggests it is reasonably comfortable with its own consensus of 16/17 PBT of c£573m. Although Argos growth was very strong, the categories in which it has done well (eg technology) tend to generate thin margins, so the beat on sales does not necessarily bring the same readacross for profit."
Richard Hunter, Head of Research at Wilson King Investment Management:
“Whilst these Sainsbury numbers are not sufficient to shoot the lights out, they are comfortably ahead of expectations. In particular, the contribution from the online and convenience channels is strong, whilst the integration of Argos is already beginning to bear fruit.
“Meanwhile, Argos aside, non-food is also progressing, most notably in the form of the clothing line and Sainsbury’s Bank.
“The transformation of the business seems to be falling in place and investors are being paid to wait in the meantime, with a healthy dividend yield of 4.5% presenting attractions given the current interest rate backdrop.”
Neil Wilson, senior market analyst at ETX Capital:
Pointed out that Sainsbury’s shares “are now up above where they were before the EU referendum in June as UK consumers continue to spend big despite Brexit uncertainty. “
But, he added: “SainsburyR17;s results are positive but have to be viewed in the wider context of the market, which seems to have enjoyed a bumper Christmas.”
Wilson said: “It increasingly looks like Sainsbury’s is losing market share, notably to Tesco, as the latter is enjoying a rebound.
“SainsburyR17;s did very well when Tesco and others were struggling but is now facing its own challenges. And all the sector-wide problems like falling margins and the sterling squeeze from suppliers are there, too. “
The ETX analyst said the real positive comes from Argos, which confirmed just what an important strategic acquisition this was for the supermarket group.
He concluded: “We have to now view Sainsbury’s as a wider business post Argos acquisition and looking ahead we expect some not insignificant cost synergies (particularly around real estate) and growth as a result of store integration.”
John Ibbotson, director of the retail consultancy Retail Vision:
“Argos will be key to the long-term success of Sainsbury’s multi-channel strategy, so this is an encouraging start.”
He added: "Sainsbury's is playing a slightly longer game than some of its competitors but future-proofing itself in this way could pay dividends down the line.
“It is by no means out of the woods yet, but having a plan that’s different to its competitors and sticking to it can count for a lot in the current environment.”
Laith Khalaf, a senior analyst at Hargreaves Lansdown:
'Looking forward 2017 promises to be a challenging year for the supermarkets, thanks to the falling pound, as they have limited scope to pass on the higher cost of imported food to customers in such a competitive environment.
'This currency crunch is likely to put pressure on margins, and profits.’
Meanwhile, German discount supermarket Lidl is snapping at the heels of bigger rivals like Sainsbury's, after enjoying a 10 per cent rise in total sales in December, marking its best Christmas performance ever.
Lidl does not disclose its like-for-like sales figures.|
|Inflation is coming back, supermarkets usually do well. Simples..|
|Argos should help SBRY to compete with Amazon.
talking of Amazon, it is now valued at $378bn.
share price is $796.
last years earnings were $1.28 per share.
Amazons insane historic PE is 621.|
|have now sold all my holdings buying tsco and cna|
|Looks pretty good to me particularly at Argos which when you consider the integration benefits have barely begun is particularly encouraging.|
|Argos will offer significant synergies.
Will turn out to be a great deal.|
|worth listening to the investors conference call - questions and answer session was very confident and positive.
Banking arm is a gem which is yet to be fully utilised, clothes sales excellent, Argos trading above expectations.|
|heading to 280p as I predicted and probably 295p if the momentum persists.
Argos has proven to be a goldmine and will strengthen the balance sheet.
The finance arm will become a major contributor too.
The credit card offered is a good one.|
|-- Sainsbury's: Total Retail sales(1) up 0.8 per cent (excl. fuel) and like-for-like Retail sales up 0.1 per cent (excl. fuel), with total volumes up and like-for-like volumes flat
-- Argos: Total sales up 4.1 per cent and like-for-like sales up 4.0 per cent
-- Combined Sainsbury's and Argos like-for-like sales up 1.0 per cent (excl. fuel)|