Tesco share price rises as group updates on strategy

Tesco share price rises as group updates on strategy

Tesco’s share price (LON:TSCO) has climbed higher in London in today’s session as the company updated investors on its strategy, signalling opportunities to improve margin. The update follows the blue-chip grocer’s quarterly update last week when the company posted what it referred to as ‘outperformance in a subdued market,’ while pointing, however, to slower growth in sales during the reported period, along with downbeat performance in Central Europe.

As of 13:46 BST, Tesco’s share price had added 2.64 percent to 233.50p, outperforming the broader market rally which has seen the benchmark FTSE 100 index add 1.13 percent to 7,440.43 points so far today. The grocer’s shares have given up just under 10 percent of their value over the past year, as compared with about a 2.4-percent fall in the Footsie.

Tesco updates on strategy

Tesco hosted a Capital Markets Day for analysts and investors today and noted in a presentation on its website that it has “the further cost reduction and mix opportunities that allow us to offset inflation, improve our customer offer and/or increase margin”.

“We have the systems and processes which enable us to enhance cash growth ahead of profit,” the blue-chip grocer continued. Reuters meanwhile noted in its coverage of the news that Britain’s biggest supermarket had further referenced opportunities to grow the distribution capacity of its online business by 35 percent and to develop partnerships such as with urban fulfilment centre firm Takeoff Technologies and delivery robot company Starship Technologies.

Analysts on blue-chip grocer

The 14 analysts offering 12-month targets for the Tesco share price for the Financial Times have a median target of 278.00p, with a high estimate of 315.00p and a low estimate of 220.00p. As of June 14, the consensus forecast amongst 22 polled investment analysts covering the blue-chip grocer has it that the company will outperform the market.

By Tsveta van Son
Tsveta van Son is part of Invezz’s journalist team. She has a BA degree in European Studies and a MA degree in Nordic Studies from Sofia University and has also attended the University of Iceland. While she covers a variety of investment news, she is particularly interested in developments in the field of renewable energy.
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