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Sainsbury to Continue to Take Shr, Concerns Overdone: Bernstein 2014-02-04 09:44:33.653 GMT
By Heather Burke Feb. 4 (Bloomberg) -- Sainsbury will continue to take mkt shr from undifferentiated grocers such as Tesco, Sainsbury, Bernstein says; raises to outperform. * Upgrades on “unwarranted” drop in stock price; recent concerns overplayed, offers compelling entry point * Valuation has dropped based on sentiment, even opposing events * Bernstein cites mkt comments such Tesco price war hurting Sainsbury; Tesco will move upmarket, take back mkt shr; Sainsbury margins very low, too heavily leveraged; returns on new space investments not achieving capital cost * Bernstein sees 5%-6% rev. expansion through mkt growth, new space, increase in online, convenience sales; margins will probably stay stable, has protection due to outperformance * NOTE: Sainsbury’s new chief Coupe faces challenge from reviving Tesco * NOTE: Sainsbury shares, valuation surpass peers under King
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--Editor: Gaurav Panchal
To contact the reporter on this story: Heather Burke in London at +44-20-7673-2044 or hburke2@bloomberg.net
To contact the editor responsible for this story: James Ludden at +44-20-7673-2645 or jludden@bloomberg.net