Sainsbury’s Shares: Recent Outperformance Limits Near-Term Upside

The recent strong share price performance from Sainsbury’s (LON: SBRY) limits the stock’s near-term upside opportunities. 

That’s according to Jefferies analysts in a note to clients this week, in which the firm downgraded the company to Hold from Buy. 

The broker kept its price target unchanged at 300p and maintained earnings estimates, noting the downgrade is “entirely” driven by the recent outperformance.

“Our view of SBRY market share opportunities in 25/26 remains unchanged,” Jefferies said. “We continue to see SBRY’s food space growth and elevated cost save program offering space for earnings resilience this year.”

In late April, Shore Capital trimmed its fiscal 2026 earnings per share forecast for “House Stock” Sainsbury’s by around 8%, citing flat retail EBIT guidance amid a competitive trading backdrop. 

That cut came despite a stronger-than-expected performance in fiscal 2025, where Sainsbury delivered adjusted pre-tax profit 1.4% ahead of Shore’s estimate, driven by a 15% year-on-year rise in core grocery EBIT.

Shore Capital praised CEO Simon Roberts for building a “firm base to progress,” but cautioned that efforts to maintain value pricing, especially with Asda seeking to regain momentum, could weigh on short-term earnings growth.

Sainsbury’s shares have rallied strongly in recent months, climbing to a high of just over 290p a share on Wednesday, before pulling back to around 284p. 

For the year-to-date, SBRY is up 4%, while it has gained over 15% in the last three months.