On Tuesday, Jefferies reiterated its Buy rating on J Sainsbury PLC (LON:SBRY:LN) (OTC: JSNSF), maintaining a GBP3.00 price target for the British supermarket chain. The firm anticipates that Sainsbury's core grocery segment will continue to exhibit strength in the first quarter, which is expected to be reported on July 2. However, a more subdued performance is forecasted for its Argos and Clothing divisions due to challenging comparative figures from the previous year.
Sainsbury's stock has seen a modest increase of 2% since late April, which is notably less robust than the 8% gain observed across the UK retail sector. The underperformance relative to Tesco (OTC:TSCDY) and the broader UK retail market is attributed to the muted results from the company's non-grocery segments. Despite this, Jefferies suggests that the stock may present a buying opportunity, particularly if any temporary price dips occur.
The firm's positive outlook is supported by several factors, including an improvement in weather conditions, easing comparative figures from last year, and signs of recovery in consumer behavior. These elements are expected to contribute to the company's performance going forward and may counterbalance the recent lag in the stock's growth compared to its peers.
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