Shares in Tesco (LON:TSCO) have inched into positive territory in today’s session, as both UBS and Deutsche Bank lifted their respective price targets on the stock, while maintaining their ‘buy’ rating on the group. The moves came after Britain’s biggest grocer updated investors on its first-quarter performance on Friday, posting a rise in like-for-like sales.
As of 13:06 BST, Tesco’s share price had added 0.26 percent to 255.45p, outperforming the broader UK market, with the benchmark FTSE 100 index having slipped into the red and currently standing 0.31 percent lower at 7,610.26 points. The group’s shares have added just under 50 percent to their value over the past year, as compared with a near two-percent rise in the Footsie.
UBS points to strong start for Booker
UBS, which has a ‘buy’ rating on Tesco, hiked its price target on the shares from 290p to 300p today, following the supermarket’s results on Friday.
“Booker is off to very strong start under the Tesco umbrella – LFL [like-for-like] sales of +12.4% is its best quarter ever (and on a base of record sales),” the analysts explained, as quoted by Proactive Investors, adding that management’s target to grow wholesale revenue by £2.5 billion looked ‘well underpinned’.
Deutsche Bank also upbeat on wholesaler
Deutsche Bank, also bullish on Britain’s biggest grocer with a ‘buy’ rating, meanwhile lifted its valuation on the stock from 270p to 275p. Proactive Investors quoted the analysts as noting that Booker was “the stand-out positive with LFL sales accelerating as the company gained more existing and new business”.
The broker further pointed out that the grocer’s sales in Asia and Central Europe remained weak, while sales growth in the UK and Republic of Ireland had come in ‘slightly ahead’ of expectations.