Who knows how poorly 2018 would have panned out for the orange supermarket 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 it hasn’t been able to do much, investors holding off ahead of its Q3 update. J Sainsbury (OTC:JSAIY) PLC now sits at a current trading price of £2.68 (Spreadex, 07/01/2018).
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.
J Sainsbury PLC (LON:SBRY) has a consensus rating of ‘Hold’ alongside an average target price of £3.13.
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