Broker tips: Sainsbury's, Reckitt, Bango

(Sharecast News) - Sainsbury's was under the cosh on Monday after Goldman Sachs downgraded its stance on the supermarket retailer to 'sell' from 'buy' and cut its price target on the stock to 335p from 390p, citing macro headwinds and intensifying competition in non-food retail.

Goldman said that while full-year EBIT and free cash flow were in line with its expectations, with grocery sales up 5.2% and a 3% retail margin, the outlook from here was likely to be more challenging.

"This view stems from our recently downgraded UK HAC growth forecast, now just +0.6% year-on-year (the lowest since 2009, ex-Covid), and rising intentions to save (April GfK)," it said. "In this context, we forecast another year of circa flat retail EBIT, assuming still elevated price inflation and grocery EBIT growth, offset by a -2% FY27E Argos LFL (FY26 +1%) and EBIT decline given the both demanding macro outlook, and growing competitive intensity."

Goldman Sachs noted that recently-launched Joybuy - a UK and European e-commerce platform owned by China's JD.com - already had 300,000 active users in March.

"Taken together, we reduce FY27E/28E EBIT -4%/-6% and target price to 335p," it added. "With our new TP implying circa 3% downside versus sector average +14% upside, we move to a sell rating on the shares."

Analysts at Berenberg lowered their target price on consumer goods giant Reckitt from 5,442p to 5,179p on Monday, following the group's recent first quarter results.

Berenberg said Reckitt's core first quarter performance "disappointed across all three regions", with several factors hindering performance - included changes to EU sanctions on Russia, which the company believes will persist throughout 2026; consumption softness from

the Middle East conflict, which it expects to weigh on growth in Q2; and Durex volume weakness in China resulting from the introduction of 13% VAT on condoms, as well as elevated promotional levels from competitors.

The German bank also highlighted that a weaker-than-expected cold and flu season weighed on performance, although management expects this headwind to abate from Q2 as it laps a reset baseline.

"Despite this, management reiterated its lfl growth guidance for FY26, anticipating a return to growth for Durex in China, positive momentum on innovations and continued strength in its non-seasonal North America business," said Berenberg, which reiterated its 'hold' rating due to limited near-term visibility on Reckitt's ability to navigate headwinds and deliver a "sustained acceleration" in top-line growth and margin expansion.

Berenberg said it had adjusted its numbers to reflect incremental top-line and margin headwinds highlighted in Reckitt's Q1 results and noted that its updated figures also reflected latest FX rates.

Over at Canaccord Genuity, analysts lowered their target price on software firm Bango from 212p to 181p on Monday following the group's recent full-year results.

Bango posted a 2% year-on-year drop in revenues, but said adjusted underlying earnings had risen 7%, with the company also reporting positive cash EBITDA, despite free cash flow being hit by a workingcapital unwind.

Bango also introduced new segmental reporting, separating its payments and subscriptions operations. Payments revenue, which relates to direct carrier billing, falling 15% to $30m, reflecting a decline in high costofsale routes acquired from NTT Docomo, though core routes grew 5%, while subscriptions revenue, covering the Digital Vending Machine and superbundling products, rose 22% to $22.2m, generating $2.7m of adjusted EBITDA.

Canaccord Genuity, which has a 'buy' rating on the stock, now expects subscription revenue growth of 18.5% in FY26 and 13.3% in FY27, with the segment predicted to turn cashEBITDA positive in FY27.

The Canadian bank stated its new target price was a result of its move to derisk its FY26 assumptions given the macro backdrop, shifting expected growth into its new FY27 forecasts.