Citi lowers Sainsbury's to 'neutral'

28th Apr 2026 13:21

(Sharecast News) - Citi downgraded supermarket chain Sainsbury's from 'buy' to 'neutral' and lowered its target price on the stock from 377p to 335p on Tuesday following the group's "broadly in-line FY26 results" and weaker-than- expected FY27 EBIT guidance.

Citi now expects FY27 retail sales excluding fuel to rise 3.6%, slightly below consensus, with Sainsbury's grocery business still seen growing 4.3%, while Argos was expected to deliver only marginal gains.

The bank also nudged its FY27 operating‑margin guidance lower, reducing its EBIT estimate by 7% to £1.05bn, around 1% below consensus but still within the group's guidance range. Earnings forecasts, on the other hand, were cut more sharply, with FY27 and FY28 earnings per share reduced by 10% and 12%, respectively.

Citi now assumes a £20m contribution from Sainsbury's financial services arm, down from £25m previously.

Reporting by Iain Gilbert at Sharecast.com