Where next for the Sainsbury’s share price ahead of its annual results?

Sainsbury’s shares will be in focus later this week when the supermarket chain reports preliminary annual results. We explain what to expect and examine where the Sainsbury’s share price could be headed.

Trader 3

When will Sainsbury’s release its full year results?

Sainsbury’s is scheduled to release preliminary results at 0700 BST on Wednesday April 28. This will cover the 12 months to the end of March 2021.

Sainsbury’s earnings consensus: what to expect

Sainsbury’s and other supermarkets have seen an uptick in demand during the pandemic, being one of the only stores that have been able to remain open throughout lockdown. However, it has also required the industry to adapt and this comes at a cost. Additional staff have been hired, more staff have had to take time off to isolate, extra equipment and measures have had to be introduced to ensure staff and customers remain safe, and they have had to invest significant sums to improve their online and click-and-collect services.

This is translating to lower profits across the industry and Sainsbury’s will be no different. The supermarket chain said in January that it expects to report annual underlying pretax profit of ‘at least’ £330 million after deciding to repay £410 million worth of business rates relief. That would be down from £586 million in the previous year but was better than expected at the time, and analysts are expecting Sainsbury’s to significantly beat its guidance with profit of £394.5 million, according to a consensus compiled by Bloomberg.

Sainsbury's Consensus

2019/20

2020/21e

Revenue

£28.99 billion

£29.25 billion

Underlying Pretax Profit

£586 million

£394.5 million

Adjusted EPS

18.3p

11.9p

Reported EPS

5.8p

(6.3p)

Sainsbury’s reported better than expected sales across the board during the third quarter covering the busy holiday season. Grocery sales grew by 6.8% and online orders accounted for 18% of the total after more than doubling year-on-year. Meanwhile, clothing sales were up 0.4% and Argos reported 8.4% growth.

Investors will want to see this improvement continue and an outlook that shows Sainsbury’s can capitalise as restrictions are lifted and things normalise this year.

Analysts are also expecting Sainsbury’s to increase its final payout for the year and pay a total dividend of 14.16p compared to 11.2p in the last financial year – however, that excludes the 7.3p special payout it made in lieu of the final dividend for the year before.

Where next for the Sainsbury’s share price?

Sainsbury’s trades above its ascending trendline dating back to mid-September. It also trades above its upward sloping 100 EMA and is just about holding above its 50 EMA showing a n established bullish trend.  

This trend has run out of steam and the RSI is pointing lower heading into bearish territory. Sellers will be looking to break below the 50 EMA and the ascending trendline support in the 240p zone.  

A break below this level could open the door to the 100 EMA at 233p beyond which the sellers could gain traction.  

On the flip slide, should the 240p support hold, the bulls will look to break above horizontal support at 255p the April high ahead of 260p the post pandemic high. 

How to trade Sainsbury’s shares

You can trade Sainsbury’s shares with City Index using spread-bets or CFDs. Follow these easy steps to start trading shares today.

  1. Open a City Index account, or log-in if you’re already a customer.
  2. Search for ‘Sainsbury’ in our award-winning platform
  3. Choose your position and size, and your stop and limit levels
  4. Place the trade 

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