Analysts are expecting a stinker when Sainsbury's plc (LON:SBRY) files a first quarter trading update on Wednesday.
HSBC wasn't very upbeat about its potential contents, saying the stock appears affected by downward momentum as underlying sales are falling at a crucial time.
It repeats a 'reduce' recommendation and 200p price target, compared to a current share price of 249p. It forecast the latest first quarter like-for-like (LFL) sales to be down around 2%.
And Barclays said it expected Sainsbury's to report a decline of 2.2%.
Barclays analysts said in a note: 'If correct, then this would be the most negative number reported by the company for two years.'
Sainsbury's is one of the 'big four' supermarkets facing competition from online rivals and discounters.
It increasingly has faced a squeeze from no-frills upstarts such as Aldi and Lidl at the bottom of its price range and upmarket competitors such as Waitrose at the top end.
Earlier this month, annual results for the year to March 12 made for grim reading as it blamed fierce competition on the high street for lower profits.
Underlying profits dropped by 14% to £587mln as sales slipped by 1.1% to £25.8bn. Like-for-like sales were 0.9% lower.
The results were well below analysts’ forecasts of underlying profits of around £613mln on £23.5bn of revenue and shares fell 3%.
Investors on Wednesday will be looking for an update on the proposed acquisition of Home Retail PLC (LON:HOME) and its catalogue chain Argos.
Sainsbury's is buying it to broaden out its range of products and compete with online retailers.
But analysts have voiced concern about how easy it will be for Sainsbury's to integrate Argos and whether it will distract it from its core food business.
Meanwhile, office provider Workspace Group (LON:WKP) is expected to report a strong second half as valuers update their portfolio valuations.
The FTSE 250 real estate investment trust, which owns over 80 properties across 4.5m sq ft in London, reported 13% net asset value growth in the first half due to 11% rental growth.
Peel Hunt expects the company, which houses some 4,000 up and coming companies, to report a similar NAV rate in the second half, again driven primarily by rising rents.
The broker has a 'buy' recommendation and a 900p target price on the stock.
It said: "However, our one concern is that we only saw 1.9% rental growth in the third quarter (put down to what appears to be an unusual seasonality), so we expect a pick-up to 5% rental growth in the fourth quarter."
Other companies expected to report include:
Interims - Shoe Zone PLC (LON:SHOE)
Trading update - WH Smith PLC (LON:WHST)