Sainsbury tops FTSE 100 after Societe Generale upgrade

24th Jun 2015 08:52

Shares in UK supermarket retailer Sainsbury rose to the top of the FTSE 100 on Wednesday after Societe Generale upgraded the stock to 'buy' from 'hold' and raised the target price to 315p from 260p, pointing to a resilient profile and attractive valuation.It said the group's profile is more resilient than many fear thanks to its strong differentiation - a clear focus on quality and in-store services - and efficient marketing policy.Also, SocGen said that although the company has limited financial leeway, there is no need for a rights issue as long as there is no significant deterioration in market conditions or abnormal margin pressure.Finally, it said that the valuation looks attractive, on 11x 2015-2016 estimated earnings, versus 17.3x for Wm Morrison and 27.7x for Tesco.At 08:57, Sainsbury shares were up 2.3% at 275.31p.