Sainsbury Shares a Buy, Tesco at Neutral – RBC Capital

UK supermarket giant Sainsbury (LON: SBRY) was on the receiving end of positive commentary from analysts at RBC Capital this week, while its counterpart Tesco (LON: TSCO) was assigned a more cautious rating by the bank.

RBC Capital analyst Manjari Dhar initiated coverage of Sainsbury with an Outperform rating and 300p per share price target in a note to clients on Tuesday.

The analyst told investors that he is bullish on the stock as Sainsbury has worked on its offer in recent years. He believes this is now paying off via the company’s improving market share trends.

Meanwhile, Tesco was initiated with a Sector Perform rating by the RBC Capital analyst, who assigned the stock a 375p a share price target.

While Dhar noted that Tesco has a market-leading position in the UK, he is more cautious on the stock as he believes further share gains may be more challenging now.

In October, analysts at Exane BNP Paribas initiated both Tesco (445p price target) and Sainsbury (340p price target) at Outperform.

The bank told investors in its note at the time that the grocery space is a “mixed bag” and that stock selection “is vital.”

Tesco shares are up around 19% so far this year, while Sainsbury is negative, down 18% in 2024.