Announces sale of Argos; no incremental buyback, but low SD EPS positive

研报英文原文证据摘录

Announces sale of Argos; no incremental buyback, but low SD EPS positive

Update

July 31, 2026 08:16 AM GMT

Morgan Stanley & Co. International plc+MJ Sainsbury PLC | Europe Izabel Dobreva

Equity Analyst

Announces sale of Argos; no Izabel.Dobreva@morganstanley.com +44 20 7677-5006

J Sainsbury PLC (SBRY.L, SBRY LN)

Retailing - Food | United Kingdomincremental buyback, but low

Stock Rating Equal-weight

Industry View In-Line

Price target 360pSD EPS positive Shr price, close (Jul 30, 2026) 356p

52-Week Range 362-282p

Mkt cap, curr (mn) £7,905

What's new? Sainsbury's has agreed to sell Argos to Swift Partners, a newly formed

Net debt (03/27e) (mn)* £5,615

company led by former retail executives Richard Pennycook, Trevor Strain and Matt EV, curr (mn)* £13,439

Truman, backed by True Capital. Cash proceeds are expected at >£120mn, but the * = GAAP or approximated based on GAAP

company has indicated those will be offset by separation costs, so our

understanding is that there will be no incremental buyback attached to the

proceeds. At EBIT level the deal is expected to be broadly neutral, as loss of Argos

profits of £9mn and dis-synergies are expected to be offset by income from new

commercial agreements with Swift. At the EPS level, the deal is expected to be low

SD EPS accretive from savings from reduced lease interest costs attached to Argos.

Our take: Overall we expect the announcement to be received well. Argos has been

a key drag on group returns and a driver of earnings volatility, which has taken the

shine off the strength of the Food business over the past few years. The sale, when

completed, will free up resources and management attention to focus on the core

business, which is a key positive. From a leverage standpoint, the deal is also helpful,