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The City view - Tesco and Sainsbury's
Archived article dated Friday August 22nd 2008
The completion of a £605 million sale and leaseback deal today (August 21) by Tesco on almost 2% of its total property portfolio suggests that UK food retailer property values are intact.
This led Bernstein to re-iterate in 'Outperform' recommendations on both Tesco and Sainsbury's as it believes they remain attractively valued and are trading at well below historic PE multiples. It believes that further property transactions are likely to offer valuation upside to the UK's food retailers as their property assets are being heavily discounted by the market.
As a result the broker sets a price target of 440p for Tesco, compared with an underlying share price of 370.4p, and a target of 360p for Sainsbury's, compared with a current price of 313.25p.
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