Broker snap: Sainsbury fairly valued, hold says Panmure

11th Jan 2012 10:14

Panmure Gordon has retained its hold recommendation on supermarket giant Sainsbury but has highlighted some positive takeaways from the firm's upbeat Christmas trading update today.Total sales for the 14 weeks to January 7th were up 7.0% from a year earlier, or up 4.5% with fuel sales excluded. Like-for-like (LFL) sales were up 4.8%, or up 2.1% excluding fuel. Panmure says these are "good figures against tough comparable."However, analyst Philip Dorgan says that the broker has kept its neutral stance on the stock as the shares "look reasonable value at these levels, given the company's cyclical stability and decent yield."Nevertheless, he adds: "It should also grow reasonably fast too - close to double digit medium term earnings growth is in prospect. We believe that returns will start to rise once the pig has passed through the python."A 350p target price is kept.Despite an earlier rise, shares were trading down 0.42% at 304.6p by 10:33.BC