Broker snap: Sales estimates trimmed at Sainsbury

12th May 2011 12:56

Even though Sainsbury's full-year results were in line with expectations, Nomura thinks there's better value - and growth - elsewhere in the supermarket sector, and downgrades its sales forecasts or 2012."Following a weaker performance in 4Q, Sainsbury painted a predictably cautious picture of a stretched UK consumer with a low level of confidence, a propensity to drive less, and buying fewer groceries to cut wastage," the Japanese broker said.Nomura trims its like-for-like sales forecasts (excluding fuel, including VAT) for the current year ending March 2012 to +1.5% (from +2% previously) and its estimates for the increased space impact on sales to +2.5% (from +3%). Nevertheless, the target price is kept the same at 365p, and a 'neutral' rating is maintained."We see greater opportunities at both Tesco and Morrison, and at more attractive valuations."---BC