Sainsbury’s house broker kept its forecasts for this year unchanged but said it agreed with the warm reception from the market to the half-year numbers.
Shares in the grocer today jumped by 6% to 209.4p following the update.
Shore Capital’s Clive Black said the grocery chain had “executed H1 FY23 well”, beating its underlying profits forecast by £21mln but he edged on the side of caution by retaining its £636mln full-year forecast.
The supermarket giant had earlier also kept its full-year guidance at £630mln to £690mln, which would require a similar performance to the first half.
"Given the still prevalent cost headwinds, ongoing proposition investment, and prevailing consumer mood, we believe that this will be reassuring to the Group's shareholders, and hopefully, the stock's rating, which we deem to be just too low," said Black.
Sainsbury’s earlier stated it had committed £500mln to lower prices for customers dealing with the cost-of-living crisis.
Simon Roberts, chief executive, added “We were the first supermarket to give our colleagues a second pay rise this year and have invested £150mln to support them”