skip to Main Content
 

Will Sainsbury shares avoid a New Year shock on Wednesday?

*

Who knows how poorly 2018 would have panned out for Sainsbury shares if it hadn’t announced that shock merger with Asda back in April? That major bit of M&A news eventually led the stock to a 4 year peak of £3.40 in August, having opened at £2.43.

However, by the end of the year it had fallen back to £2.65, as a horrible December erased most of its post-deal announcement glow. Since the start of 2019 the orange supermarket hasn’t been able to do much, investors holding off ahead of its Q3 update. Sainsbury shares now sit at a current trading price of £2.68.

Like-for-like sales jump in November

The firm’s last statement came in early November, as it reported its half year results. There it unveiled a 3.5% rise in underlying group sales to £16.88 billion, alongside a decent 0.6% jump in like-for-likes. Sainsbury’s claimed that adding Argos outlets to its supermarkets was ‘driving an increase in trading intensity’.

Underlying pre-tax profit, meanwhile, climbed 20.3% to £302 million, with an 18.4% surge in underlying basic earnings of 10.3p per share, and an unchanged interim dividend of 3.1p. However, factor in exceptional costs and pre-tax profits plunged from £220 million to £132 million year-on-year.

In terms of Wednesday’s Q3 figures, analysts are expecting like-for-likes to rise 0.3%, down from the 1% growth managed across the second quarter. Investors will also be on the lookout for any revisions to the firm’s full year underlying pre-tax profit guidance, after Sainsbury’s had stated it was ‘on track’ to deliver on the market consensus of £634 million back in November.

Sainsbury shares have a consensus rating of ‘Hold’ alongside an average target price of £3.13.

  • Visit spreadex website

This article is brought to you in association with Spreadex. All opinions expressed in this article are from the author and do not necessarily represent the opinions of The Armchair Trader. You can find out more about Spreadex products and services here, or find more articles from Connor Campbell here.

Like this article? Sign up to our free newsletter.

This article does not constitute investment advice. Do your own research or consult a professional advisor.

The Armchair Trader's 'How to' Guides

In-depth Reports

Detailed reviews of selected companies and investment trusts.

Thanks to our Partners

Our partners are established, regulated businesses and we are grateful for their support.

Aquis
FP Markets
IG
Pepperstone
WisdomTree
CME Group
Back To Top