Barclays has given J Sainsbury PLC (LSE:SBRY) an 'overweight' rating following its first-quarter results, despite sales falling by more than 4%.
The target price has been set at 300p, with the rating compared to the European food retail sector being set as neutral.
Sales were slightly worse than the Barclays forecasts, with total sales growth down 4.5% compared to forecasts of 4.4% (read more).
Retail like-for-like sales were also down 4% compared to predictions of 3.7%.
Grocery sales, compared to forecasts, were hit the hardest seemingly, down 2.4% compared to predictions of 1.4%.
The broker noted that there were some specific points of interest in the results, namely that its grocery inflation remains below the market.
To add to that, the retailer is investing £500mln to keep prices low, hinting further cuts may be introduced to keep customers coming through the door.
On a value index compared to Aldi, it is also at its strongest point ever, improving 3.5% year-on-year, further highlighting its ‘cheaper’ pricing as the cost-of-living crisis continues to bite consumers.
Shares rose 0.8% to 210p.