ShoreCap says Sainsbury valuation multiples 'undemanding'

ShoreCap analysts labelled Sainsbury's current valuation "undemanding", going on to add that its 5% dividend yield was "attractive".

In a preview of the grocer's first quarter results due out during the following week, they also said they would be surprised if Sainsbury were to adjust its guidance for full-year post tax profits of £640m-£700m.

Underlying its estimates, ShoreCap said it was assuming a "broadly flat" Grocery contribution year-on-year with General Merchandise expected to account for the 'delta' due to tough comparatives.

The broker's own estimates for post tax profits of £660m, which would be down from £690m during the previous year.

ShoreCap was the house broker for Sainsbury.