J Sainsbury plc (SBRY.L) stock analysis

In our weekly check, J Sainsbury plc is graded C (A to F). Of 25 checks on debt, profit, cash flow and trend: 13 pass, warnings: 6, red flags: 6.

About J Sainsbury plc

J Sainsbury plc is a Consumer Defensive company (Grocery Stores) based in the United Kingdom, listed on LSE as SBRY.L.

What our checks show for SBRY.L

Red flags

• The net margin fell by 1.1 points over 5 years, to 1.1%: the company keeps less of each sale as profit.
• The gross margin fell by 1.2 points, to 6.2%: costs are rising faster than prices.
• Analysts expect revenue to shrink about 0.8% a year.
• The net margin is only 1.1%: little room if costs rise.
• The dividend takes 110% of profit: little cushion if profit falls.
• The stock has fallen as much as 71% from a peak. Would you have held through that?

Warning signs

• Net debt is 2.8x a year of EBITDA (debt/equity 1.15). That limits room in a downturn and raises refinancing risk.
• Operating profit covers interest only 3.6 times: a weak year could make the payments hard.
• Revenue grew only 2.2% a year over the last 3 years.
• Free cash flow is only 3.5% of revenue.
• The stock is still below its previous peak.
• Return on capital (ROCE) is only 7.4%.

Strengths

• Operating cash flow is 4.68x net profit: the profit arrives as real cash.
• Analysts expect earnings per share to grow about 20% a year over the next years.
• Earnings per share grew 23.8% a year over the last 3 years.
• Net profit grew 22.9% a year over the last 3 years.
• A large company: market value $10.18 billion.
• Actively traded: about 8.5 million shares a day.

Similar companies

ACI · SFM · CA.PA · KESKOB.HE · MRU.TO · AD.AS

Questions

What grade does J Sainsbury plc (SBRY.L) have?

In our weekly check, J Sainsbury plc is graded C (A to F). Of 25 checks on debt, profit, cash flow and trend: 13 pass, warnings: 6, red flags: 6. The grade is a risk check, not a buy or sell recommendation.

What are the main risks of SBRY.L stock?

This week's biggest flags for J Sainsbury plc: Margins falling, Gross margin falling, Weak revenue forecast. In total 12 of 25 checks show a warning or a red flag.

What does J Sainsbury plc do?

J Sainsbury plc is a Consumer Defensive company (Grocery Stores) based in the United Kingdom, listed on LSE as SBRY.L.

The grade is a risk check, not a price forecast, and not investment advice. In our 10-year test (S&P 500, 2016-2026), stocks we graded A or B fell more than 30% 2-3 times less often than D or F, without a lower average return.

Updated 2026-10-24

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