Tesco, Sainsbury Shares Climb Following JPMorgan Upgrades

Tesco (LON: TSCO) and Sainsbury (LON: SBRY) shares gained more than 2% Thursday after JPMorgan issued double upgrades for both UK supermarket giants, reflecting optimism about their future performance.

JPMorgan analyst Borja Olcese upgraded Tesco from “Underweight” to “Overweight” and significantly raised the retailer’s price target to 410p from 270p per share. 

The bank US investment bank cited potential upside risks to Tesco’s fiscal 2025 and 2026 outlook, highlighting confidence in its ability to outperform market expectations. The move aligns with JPMorgan’s broader view that the European food retail sector will shift towards a “stock-picker territory” in 2025 as macroeconomic conditions evolve.

Similarly, Sainsbury received a double upgrade from “Underweight” to “Overweight,” with its price target nudged up to 310p from 304p apiece. 

While the price adjustment was modest, analysts pointed to similar upside potential in the retailer’s mid-term outlook, underpinned by robust operational fundamentals and strategic positioning in the sector.

The upgrades reflect JPMorgan’s belief that both Tesco and Sainsbury are poised to benefit from a more selective investment environment in the European retail space.

Sainsbury’s shares are trading above the 260p mark on Thursday after a 2.8% rise from Wednesday’s close, while Tesco has gained 2.3% so far in the session, trading above 366p a share.

Just over a week ago, RBC Capital initiated Tesco with a Sector Perform rating and Sainsbury with an Outperform rating. 

The bank said Tesco's further share gains may be more challenging despite its leading position in the UK, while Sainsbury is seeing improving market share trends.