Broker snap: CEO exit at Sainsbury gives 'more clarity', says S&P Capital IQ

29th Jan 2014 16:02

The departure of Justin King from Sainsbury more or less received a negative reaction from markets on Wednesday, as investors showed concerns with the departure of the supermarket chain's long-running boss.However, S&P Capital IQ chose to take a more positive view, raising its rating from 'sell' to 'hold'.King, who has been running the grocery retailer for the last 10 years, will hand over to Group Commercial Director Mike Coupe in July 2014."We now see more clarity in terms of key management succession and, more importantly, its long-term growth strategy," Research Analyst William Mack said."This would be a seamless transition, in our opinion, given Coupe's similar background as King, and we also think he is a good fit for this role."S&P Capital IQ left its forecasts unchanged for the company but raised its target price from 340p to 355p after applying a slightly higher multiple to the stock's valuation.The stock was down 2.61% at 347.4p before the close of trade.BC