Sainsbury’s Shares (SBRY) Test 300p: Analyst Raises Price Target, Remains Bearish

J Sainsbury's share price (LON:SBRY) is testing 300p today, up 0.81% as an adjustment in its price target by Morgan Stanley sends some mixed messages. Despite the increase in target, the firm maintains an “Underweight” rating, with the new mark below current price action, signalling potential underperformance relative to the broader market.

Morgan Stanley analyst Izabel Dobreva raised the firm's price target to 261p from 255p, continuing to reflect downside of more than 10% from current levels. The continued “Underweight” rating also tempers enthusiasm, suggesting the analyst believes the stock's potential is limited, even with an upside revision. 

Deutsche Bank's also initiated of coverage in July with a “Hold” rating, indicating a neutral expectation for the stock's performance. RBC Capital Markets also made a slight upward adjustment, increasing its price target from 300p to 305p, reflecting a measured optimism. Conversely, Jefferies downgraded J Sainsbury from “Buy” to “Hold” in May, adopting a more cautious stance.

Recent financial results have painted a mixed picture. In July 2025, J Sainsbury reported a significant increase in first-quarter like-for-like sales, bolstered by the strong performance of its “Taste the Difference” product range.

This contributed to the company achieving its highest estimated market share in nearly a decade. However, these positive figures have not universally swayed analyst sentiment.

Adding to the corporate activity, J Sainsbury executed a share buyback of 316,905 shares in August as part of an ongoing program aimed at enhancing shareholder value, a move often interpreted as a sign of confidence in the company's financial stability. Furthermore, the appointment of new retail and technology executives also signals a strategic emphasis on fortifying its retail and technological capabilities.

The divergence in analyst ratings, coupled with internal strategic shifts, creates a complex outlook for J Sainsbury. While some firms see potential upside, others remain sceptical, particularly given the competitive landscape and evolving consumer behaviour. 

Ultimately, the price target increase by Morgan Stanley, while seemingly positive, is overshadowed by the firm's continued “Underweight” rating, leaving investors to navigate a landscape of conflicting signals and strategic uncertainties. This divergence of opinion underscores the complexities facing the company as it navigates a competitive market and evolving consumer preferences, potentially impacting future market sentiment.