Tesco PLC (LSE:TSCO) and J Sainsbury PLC (LSE:SBRY) shares moved higher on Thursday morning following double-upgrades by JP Morgan.
Both were lifted to ‘overweight’ from ‘underweight’ by the US bank in a note that highlighted potential upside in the UK’s grocery sector.
“Our view into 2025 is more balanced and varies by market,” JP Morgan analysts said.
“In particular [we are] more constructive on the UK, while we believe that the EU food retail sector will move into stock-picker territory.”
Tesco and Sainsbury both offered “upside risk” moving into next year, the analysts added.
B&M European Value Retail SA (LSE:BME) was also highlighted for potential “over-earning,” though JP Morgan noted that it has lower expectations relative to the wider City consensus.
Sainsbury’s and Tesco gained 2.8% and 2.4% respectively on Thursday, as B&M climbed by 1.2%.
Discounter B&M is in line to be relegated from the FTSE 100 at the next quarterly reshuffle.