Tesco share price rallies as Goldman Sachs turns bullish on grocer

Analysts believe supermarket will continue to take market share from competitors

Tesco share price rallies as Goldman Sachs turns bullish on grocer

Shares in Tesco (LON:TSCO) have jumped in London in today’s trading, as Goldman Sachs turned bullish on Britain’s biggest supermarket. The analysts believe that the blue-chip grocer will continue to take market share from its competitors.

As of 13:07 GMT, Tesco’s share price had added 4.18 percent to 203.30p, outperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.19 percent higher at 7,353.19 points. The group’s shares have added nearly five percent to their value this year, as compared with about a nine-percent gain in the Footsie.

Goldman Sachs sees Tesco as ‘buy’

Goldman Sachs raised its price target on Tesco from ‘sell’ to ‘buy’ today, and hiked its price target on the shares from 155p to 200p. The Times reports that the analysts believe that the company will continue to take market share from its competitors while supporting comparable sales growth.

“This should drive greater margin expansion than we forecast before,” the US bank pointed out, adding that Tesco “does not have to beat the discounters”.

“Our assumptions are simply that Tesco’s momentum, strategy and reinvestment of savings allow it to continue taking share from everyone else,” Goldman Sachs explained, as quoted by The Times.

The comments follow recent upbeat industry data out of Ireland, where the grocer benefitted from lower prices.

Other analysts on Tesco

The 16 analysts offering 12-month price targets for Tesco for the Financial Times have a median target of 200.00p on the shares, with a high estimate of 270.00p and a low estimate of 165.00p. As of December 4, the consensus forecast amongst 22 polled investment analysts covering the blue-chip supermarket advises investors to hold their position in the company. 

As of 13:27 GMT, Tuesday, 05 December, Tesco PLC share price is 203.77p.

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