Tesco share price: Deutsche Bank trims valuation

Deutsche Bank has lowered its target on the Tesco share price (LON:TSCO), while maintaining a bullish rating on the stock. The mov came after the latest Kantar Worldpanel data pointed to flat sales at Britain’s biggest grocer in the 12 weeks to May 19.

Tesco’s share price has climbed higher in London in today’s session, having gained 0.62 percent to 227.20p as of 14:55 BST. The advance is largely in line with gains in the broader UK market, with the benchmark FTSE 100 currently standing 0.58 percent higher at 7,226.97 points.

Deutsche Bank trims target on Tesco share price

Deutsche Bank, which has a ‘buy’ rating on Tesco, lowered its price target on Britain’s biggest grocer from 300p to 295p. Proactive Investors reported that the broker had further trimmed its estimates for pre-tax profit and revenue for fiscal years 2020-22. The comments came after Kantar Worldpanel reported yesterday that the UK grocery market had grown  by 1.3 percent during the 12 weeks to May 19. Tesco’s share meanwhile stood at 27.3 percent for the reported period, while overall sales were flat.

“Quarterly UK retail sales growth ex fuel has a 79-percent correlation to Kantar data, and while Kantar and Tesco’s periods do not perfectly overlap, Kantar suggests that Tesco will report +0.2-percent retail growth for the first quarter of 2020, close to our expectations,” the analysts pointed out, as quoted by the newswire, adding that they expected the company “to report 0.4 percent sales growth ex fuel, with 0.7 percent like-for-like growth ex fuel”.

Other analysts on Britain’s biggest supermarket

Shore Capital reaffirmed the FTSE 100 grocer as a ‘buy’ earlier this month, without specifying a target on the Tesco share price. According to MarketBeat, the blue-chip group currently has a consensus ‘buy’ rating and an average valuation of  277.90p.