Proactive Investors - Sainsbury’s can be “re-rated” notably higher Shore Cap believes based on the plans laid out at an investor day yesterday.
The FTSE100-listed supermarket, which also used the meeting to highlight the strengths of its executive team below C-suite level, added it will emphasise the stronger brands and lower prices going forward.
“Much more needs to be faced into and undertaken, however, for the group's earnings to enter a trajectory of sequential growth,” Shore Cap said in a note.
Sainsbury’s should draw on the “fast-moving” environment around automation and artificial intelligence added the broker.
“Strategically, Sainsbury has much to think about, as do all multi-channel retail businesses at this time when it comes to human capital, fixed assets, processes, and policies,” added the bank.
Analysts also suggested that the “surprise investment” from wholesaler Bestway had helped to prop up the supermarket's share price, although this was not discussed at the meeting.
Bestway, which owns Costcutter, Bargain Booze and Well Pharmacy, now has a 4.47% stake in Sainsbury’s.
The share price has risen nearly 20% so far this year, climbing 0.2% on Wednesday to 268.5p.