Shore Capital continues to see Tesco (LON:TSCO) as a ‘buy,’ welcoming the completion of the supermarket’s tie-up with wholesaler Booker Group, Citywire has reported. The cash-and-shares deal, which was first announced a little over a year ago, was implemented by means of a court-sanctioned of arrangement yesterday.
Tesco’s share price reacted positively to the news yesterday, surging 0.99 percent to close at 204.00p. The shares outperformed the broader UK market, with the benchmark FTSE 100 index adding 46.08 points to end the session 0.65 percent higher at 7,115.98. The group’s shares have added more than eight percent to their value over the past year.
ShoreCap bullish on Tesco
Shore Capital reiterated its ‘buy’ rating on Tesco, after Britain’s biggest grocer formerly announced that it had completed its acquisition of Booker.
“Shore Capital has not been bowled over by the Booker merger, it has to be said, but we welcome its completion and so the commencement of the job in hand of combining the two entities and extracting targeted synergies,” the broker’s analyst Clive Black said, as quoted by Citywire, adding that more broadly, ShoreCap’s positive stance on the blue-chip grocer reflected “our well-versed expectations that margins can rebuild and on our current expectations support strong earnings per share growth to 2020 with corresponding rating compression”.
Other analysts on supermarket
Jefferies meanwhile upgraded its stance on Tesco to ‘buy’ yesterday, with a price target of 250p on the shares. According to MarketBeat, the blue-chip supermarket currently has a consensus ‘hold’ rating and an average price target of 208.40p. As of March 5, 2018, the consensus forecast amongst 20 polled investment analysts covering Tesco for the Financial Times also advises investors to hold their position in the company.