Obviously the supermarket’s year to date has centred around April’s shock announcement that it would be merging with its Walmart (NYSE:WMT) owned UK peer. Before that Sainsbury’s was having a mixed time of it, sinking to a 4 month low of £2.24 at the end of March, before rallying back towards £2.70 across April.
The aforementioned Asda reveal sent the stock 15% higher in a single session, allowing it to briefly strike a near 4 year peak. Since then it hasn’t drifted too far from the levels seen in the aftermath of the announcement, broadly moving between £3 and £3.20. J Sainsbury (OTC:JSAIY) has a consensus rating of £3.11.
While the Asda news understandably drew focus at the end of April, the release also came with Sainsbury’s full year results. Group sales rose 9% to £31.7 billion, with like-for-likes climbing a solid 1.3%. Underlying pre-tax profit jumped 1.4% to £589 million, largely propelled by an 11% surge in the second half of the financial year.
Of course, the completion merger is far, far from a certainty. The Competition and Markets Authority still have to give the sector-changing deal the go ahead, while there looks like there are plenty of opponents to the supermarket marriage in the government, with CEOs Mike Coupe and Roger Burnley given a roasting by the Food and Rural Affairs Committee.
It might be too early for a substantial update on the deal, though investors will be on the lookout for any titbits. As for its quarterly performance, the latest report from Kantar Worldpanel showed that it was the only supermarket to see a decline in sales for the 12 weeks to June 17th, the 0.2% drop leading to a 0.4% slide in its market share. It’ll be interesting to see what kind of figures that translates to next week.
J Sainsbury PLC (LON:SBRY) has a consensus rating of ‘Hold’ alongside an average target price of £3.03.
Disclaimer: Spreadex provides an execution only service and the comments above do not constitute (or should not be construed as constituting) investment advice or recommendations, or a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any person placing trades based on their interpretations of the above comments does so entirely at their own risk. Spreadex Ltd is a financial and sports spread betting and sports fixed odds betting firm, which specialises in the personal service and credit area. Founded in 1999, Spreadex is recognised as one of the longest established spread betting firms in the industry with a strong reputation for its high level of customer service and account management.
In relation to spread betting, Spreadex Ltd is authorised and regulated by the Financial Conduct Authority. Spread betting carries a high level of risk to your capital and can result in losses larger than your initial stake/deposit. It may not be suitable for everyone, so please ensure you fully understand the risks involved."