Interactive Investor argues that next week’s announcement on Tesco’s (LON:TSCO) future prospects looks bright, Citywire reports. The comments follow the FTSE 100 group’s first-quarter update yesterday when Britain’s biggest grocer posted what it referred to as ‘outperformance in a subdued market’.
Tesco’s share price rose in the previous session after swinging between gains and losses, as investors digested the first-quarter update. The stock gained 0.88 percent to end trading at 229.50p, outperforming a flat FTSE 100. This morning, the shares have slipped into the red, having given up 0.35 percent to 228.70p as of 08:05 BST, as compared with a 0.26-percent fall in the benchmark index.
Interactive Investor weighs in
Citywire quoted Interactive Investor analyst Richard Hunter as commenting yesterday that Britain’s biggest supermarket Tesco had undergone a ‘radical overhaul’ and then continued with the ‘masterstroke’ acquisition of Booker. While the grocer’s trading update was light on strategic detail, the broker reckons that the company’s forthcoming capital markets day will set out ‘further value opportunities’.
“With many of its strategic plans already showing signs of success, prospects for Tesco are looking bright in the eyes of the market, where the general view of the shares as a strong ‘buy’ remains intact,” Hunter pointed out, adding, however, that hurdles remained “in the notoriously competitive sector” and it remained to be seen what impact Amazon and the discounters have on the industry.
Other analysts on supermarket
Goldman Sachs, which is bullish on the blue-chip grocer with a ‘buy’ rating, set a target of 276p on the Tesco share price today, while analysts at HSBC, which also see the company as a ‘buy,’ lifted their valuation on the stock from 265p to 275p yesterday. According to MarketBeat, the FTSE 100 supermarket currently has a consensus ‘buy’ rating and an average price target of 279.80p.