Tesco share price: Shore Capital bullish on grocer ahead of interims

Group’s banking unit fined £16.4m for cyberattacks

Tesco share price: Shore Capital bullish on grocer ahead of interims

Shore Capital continues to see Tesco (LON:TSCO) as a ‘buy’ ahead of the group’s interims tomorrow, pointing to scope for special returns over the medium-term, WebFG News reports. In a separate development, the Financial Conduct Authority (FCA) fined the supermarket’s banking unit yesterday over a cyberattack which took place nearly two years ago.

Tesco’s share price has fallen into the red ahead of the company’s results, having given up 1.31 percent to 233.60p as of 10:31 BST. The stock is underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.62 percent lower at 7,448.86 points.

ShoreCap bullish on Tesco

Shore Capital reaffirmed Tesco as a ‘buy’ yesterday, as Britain’s biggest grocer prepares to post its half-year results tomorrow. WebFG News reported that the broker’s analysts Clive Black and Darren Shirley have forecast a rise of between two percent and 2.5 percent in the group's like-for-like sales, ‘good progress’ in Ireland and an ‘improving trend’ in Thailand.

Pre-tax profits meanwhile are pencilled in at £868 million, versus consensus of £811 million for earnings per share of 6.8p and up by 35 percent versus the previous year.

The newswire also reports that the analysts  spied scope for special returns over the medium-term.

“With sound sales growth, robust and ongoing margin rebuilding in the core UK aided by structural efficiency work, still judicious capital expenditure and Booker’s growing contribution, we expect strong cash generation and de-leveraging from Tesco,” they pointed out.

FCA fines banking division

Tesco separately announced in a statement yesterday that the FCA had fined its banking unit £16.4 million over a criminal fraud attack in November 2016.

“We are very sorry for the impact that this fraud attack had on our customers. Our priority is always the safety and security of our customers’ accounts and we fully accept the FCA's notice,” Gerry Mallon, Tesco Bank Chief Executive, said in the statement, adding that the lender had ‘significantly enhanced’ its security measures.  

As of 10:37 BST, Tuesday, 02 October, Tesco PLC share price is 233.70p.

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