Tesco Share Price: Retailer Ditches JPMorgan and Nomura

on Sep 19, 2013

iNVEZZ.com, Thursday, September 19: Tesco (LON:TSCO) has ditched Nomura and JPMorgan Cazenove following a review of its corporate brokers. Barclays has been appointed to act as joint corporate broker along with the incumbent Deutsche Bank.

The Financial Times yesterday quoted Tesco as saying that the changes were “in line with good practice and in common with other listed companies.”
Earlier this year, JPMorgan lowered their recommendation on Tesco’s stock to “neutral” from “overweight” shortly before Britain’s biggest supermarket by sales, which is trying to turn round its business at home and is battling difficulties in its international operations, released its first-quarter results. According to an unnamed source quoted by The Times, Tesco has parted company with JPMorgan because the broker’s forecasts were below that of Tesco’s guidance, while Nomura was dropped because its main focus is on Japan, its main market.

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The change of brokers is part of a broader overhaul at Tesco with chief executive Philip Clarke aiming to reshape international operations and rebuild business in Britain after succeeding Sir Terry Leahy two years ago. Part of that retrenching in foreign markets was last week’s announcement that Tesco has agreed to sell most of its U.S. Fresh & Easy chain to U.S. billionaire Ron Burkle’s investment firm, Yucaipa Companies. (Tesco Share Price: British Retailer Exits U.S. Market)

Tesco is expected to release first-half results in two weeks’ time and there is “some nervousness in the City about the group’s performance” due to “challenging conditions” in Tesco’s markets, particularly in central Europe, the FT noted in its coverage of the news of the latest change of advisers.
Analysts on Tesco
On Monday, Deutsche Bank forecast a two-percent increase in Tesco’s first-half underlying earnings before interest and tax.

!m[Barclays Joins Deutsche Bank as Joint Corporate Broker ](/uploads/story/5577/thumbs/pic1_inline.jpg)
Earlier this month, Shore Capital analyst Clive Black projected a fall in Tesco’s first-half trading profit to £1.6 billion compared to £1.66 billion recorded a year earlier. The analyst also cut his forecast of full-year group trading profits by four percent to £3.47 billion.

Barclays acts as corporate broker for 37 companies, including 15 FTSE 100-listed firms and has worked with Tesco previously. Last year, it acted as joint lead manager on the company’s retail bond issue.
In today’s London trading, Tesco’s shares were up 0.33 percent at 372.80p as of 8:57 BST
**As of 8:46 BST buy Tesco shares at 372.05p**
**As of 8:46 BST sell Tesco shares at 371.90p**


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