JPMorgan has reaffirmed its “overweight” rating on J Sainsbury Plc (LSE:SBRY) and added the grocer to its Positive Catalyst Watch, citing better execution and supportive industry trends. The announcement pushed Sainsbury’s shares up 5% on Monday.
The brokerage also lifted its price target from 330p to 363p, suggesting an 18% upside from the September 12 close of 307p.
The move comes ahead of Sainsbury’s first-half results, due on 6 November, with JPMorgan anticipating earnings above guidance. The firm raised its fiscal 2026 EBIT estimate by around 5.5%, forecasting £1.13 billion versus company guidance of roughly £1 billion. It also projected adjusted earnings per share of 26.9p for fiscal 2026 and 33.5p for fiscal 2027, both exceeding consensus expectations.
Analysts noted steady momentum in Sainsbury’s grocery operations and improvements at Argos, which has returned to positive sales growth after several quarters of decline.
“We now sit c10% above the company guidance for retail Adj. operating profit of c£1bn (c10% above consensus as well),” JPMorgan said in its report.
Sector data supported the brokerage’s view. In the four weeks to 10 August, Sainsbury’s sales rose 4.8% year-on-year, outpacing total market growth of 4%, according to Worldpanel by Numerator. The grocer also gained 12 basis points of market share, while competitors Asda and Morrisons continued to lose ground.
JPMorgan highlighted upcoming catalysts, including easier September comparisons, the Christmas trading season, and continued strength in Sainsbury’s “Taste the Difference” premium range, which expanded 15% in fiscal 2025. The line has grown from £1.2 billion in 2019/20 sales to £1.6 billion in 2023/24, averaging roughly 7% annual growth.
The analysts valued Sainsbury using a discounted cash flow model, assuming a weighted average cost of capital of 10.2% and a terminal growth rate of 1%, arriving at a fair value of 363p per share by February 2027.
JPMorgan stated that the Positive Catalyst Watch reflects short-term confidence ahead of upcoming results, noting that its broader “overweight” rating continues to rely on the stability of the U.K. grocery market and ongoing capital return prospects.
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