Upgrade justifies Sainsbury’s share price surge
IG’s Chris Beauchamp: “This morning’s news from Sainsbury’s shows that the 25% gain in its shares in the last six months was based on more than just hope. At around 14 times forward earnings, the shares are now at the peak of the valuation range seen over the last five years, which might mean the gains slow from here, unless the supermarket can keep pulling rabbits out of its hat.”
Last orders for Diageo as forecast cut
Adam Vettese, market analyst for eToro says: “Diageo’s latest update reveals a somewhat concerning outlook with some signs of resilience but also significant headwinds, and a cut in forecast being the main talking point. While there was a steady performance in Europe, the slowdown in the US and China poses a real challenge. The impact of elevated living costs is visible, with US consumers spending more but buying less. This is weighing heavily on premium spirits demand and profitability, as well as stiff competition in the tequila space.
“Despite short term pressures, Diageo’s strong cash generation supports a healthy dividend, maintaining appeal for income focused investors. However, the high payout ratio raises questions about reinvestment capacity for growth.
“The sharp share price decline, down almost 30% this year alone, reflects market scepticisms about the company’s ability to quickly navigate these challenges. While some see this as a potential value opportunity given the attractive valuation, particularly against historic multiples. The flip side is that it could turn into a value trap if underlying demand fails to improve.
“Overall, Diageo remains a leading, defensive player with strong brands, but investors should watch closely how management addresses continued sluggish demand and how long it will take for consumer confidence to bounce back.”
Sainsbury’s is proving there’s plenty of life left in the middle aisle
Mark Crouch, market analyst for eToro says: “Sainsbury’s followed Tesco in raising its full-year profit forecast after a first half that comfortably beat expectations. It now expects to deliver retail underlying operating profit of more than £1 billion for the year to March 2026, after posting £504 million for the first half, a modest 0.2% rise but one that underlines steady progress in a cutthroat grocery market. Retail sales climbed 4.8% to £15.6 billion, helped by steady food demand and continued gains in market share.
“Sainsbury’s shares surged to their highest level in more than a decade in October, buoyed by talks to offload Argos to China’s JD.com. But the truth is, the rally was already underway. Investors like the prospect of a leaner, sharper Sainsbury’s, one freed to focus on its core grocery business. Cementing its hold on second place in Britain’s supermarket wars, with Tesco still out of reach but the discounters closing fast, the supermarket giant faces a decisive Christmas. Get it right, and 2025 could be the year Sainsbury’s finally steps out of Tesco’s shadow.”
Pharma at a crossroads: GLP-1 momentum meets earnings season
Lale Akoner, global market analyst, says: “With AstraZeneca delivering a Q3 beat and Moderna set to report, this week offers a clear read on how major players are navigating pharma’s shifting landscape. As COVID-era tailwinds recede, investor focus has moved to pipeline durability, cost discipline, and exposure to long-term growth drivers, chief among them, GLP-1 therapies.
“Moderna remains in rebuild mode. COVID vaccine revenues are expected to show seasonal softness, and while the oncology pipeline holds promise, market enthusiasm hinges on clearer visibility into upcoming data, particularly for its melanoma candidate. Without that, the stock may struggle to re-rate near term.
“AstraZeneca, by contrast, delivered stronger-than-expected profit growth driven by its oncology and diabetes franchises. Its core businesses, oncology, respiratory, and rare diseases remain robust. More importantly, its recent deal with Eccogene to develop an oral GLP-1 signals a calculated move into what could become a $100B+ market. Pills may significantly expand access versus injectables, reshaping how obesity is managed at sc.
“This is the strategic fork in the road for pharma: companies that successfully pivot to scalable, chronic care solutions like oral obesity meds could drive the next cycle of outperformance. Those making bold, forward-looking bets are more likely to emerge ahead. Earnings this week won’t answer everything, but they’ll show who’s playing offense and who’s just managing decline.”
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