J Sainsbury PLC (LSE:SBRY) is weaker and less equipped to deal with a challenging consumer environment than Tesco PLC (LSE:TSCO), says JPMorgan.
Analysts from the investment bank said that recent quarterly updates across the sector support its reasons for retaining a positive outlook.
That includes a “supportive overall earnings season, less crowded positioning, valuation discount and a positive read-across for the US grocery industry.”
Additionally, the broker notes that despite a likely more challenging scenario for consumers from the third quarter, it comes away reassured in its stance on the sector.
Tesco remains valued as 'overweight', while Sainsbury’s is underweight as it sees it as the weakest positioned to cope with a challenging consumer environment.