Broker snap: Sales trends a concern at Sainsbury

11th Nov 2009 11:25

The renaissance of supermarket group Sainsbury continues apace after forecast busting interim profits were announced on Wednesday morning, but Seymour Pierce is maintaining a cautious stance on the group's prospects.'Although the interim results came in at the top end of expectations there will be some nervousness arising from the company's recent sales performance,' reckons Seymour Pierce analyst Freddie George.The broker is sticking with its fiscal 2009/10 profit before tax forecasts of £625m and will not be changing its 'hold' recommendation for the stock.'The stock is rated at 13.4 times 2009/10 earnings which compares to the ratings of Tesco at 13.4 times and Wm Morrison 14.5 times. We continue to prefer Tesco, which appears to be recovering share from Sainsbury following the launch of double club card points while Morrison is still seeing strong sales momentum,' the broker concludes.