Shore Capital continues to see Tesco (LON:TSCO) as a ‘buy,’ noting that it does not expect the grocer’s deal with Booker Group (LON:BOK) to ‘move the dial’ on the supermarket’s shares, Citywire has reported. The comments came after shareholders in both companies okayed the tie-up earlier this week, with the deal now expected to complete on March 5.
Tesco’s share price fell in the previous session, shedding 1.04 percent to close at 208.60p, underperforming the broader UK market, with the benchmark FTSE 100 index giving up 56.27 points to end the session 0.78 percent lower at 7,175.64. The group’s shares have added just under 10 percent to their value over the past year, as compared with a near three-percent fall in the Footsie.
ShoreCap bullish on Tesco
Shore Capital reaffirmed its ‘buy’ stance on Britain’s biggest grocer yesterday, without specifying a price target on the shares.
“We have a ‘buy’ recommendation on Tesco’s shares largely predicated upon an expectation of steady revenue growth, further margin recovery and so rating compression of the group’s earnings multiple, particularly in full year 2020,” the broker’s analyst Clive Black explained, as quoted by Citywire, adding that while Shore Capital needed to confirm the financial aspect of the Booker merger, it was “not expected to move the earnings dial in the short-term at least”.
Other analysts on retailer
The 15 analysts offering 12-month price targets for Tesco for the Financial Times have a median target of 219.00p on the supermarket’s shares, with a high estimate of 270.00p and a low estimate of 170.00p. As of February 27, the consensus forecast amongst 20 polled investment analysts covering the blue-chip group advises investors to hold their position in the company.