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Tesco share price: Barclays flags sales growth slowdown

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Barclays expects Tesco (LON:TSCO) to unveil that its sales growth slowed down in the first quarter of its financial year, Interactive Investor reports. The comments come ahead of the blue-chip supermarket’s update on June 15.

Tesco’s share price has advanced in London this morning, having added 1.10 percent to 248.40p as of 10:23 BST. The stock is outperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.74 percent higher at 7,734.83 points. The group’s shares have added more than 35 percent to their value over the past year, as compared with about a 2.5-percent gain in the Footsie.

Tesco to post Q1 results

Tesco is scheduled to post first-quarter results on June 15 and Interactive Investor reports that the grocer’s UK like-for-like sales are forecast by Barclays to have slowed to 1.7 percent from 2.3 percent in the previous quarter. The newswire quoted European food retail analyst James Anstead as commenting that the slowdown “ought to be considered a very reasonable outcome in the context of slowing inflation and generally unhelpful weather in Q1”.

Barclays meanwhile sees the supermarket’s dividend yield rising to 2.2 percent in the current financial year, then 3.2 percent and four percent in the following years.

In a separate development, Kantar Worldpanel disclosed this week that Tesco had  experienced a sales increase of 2.2 percent in the 12 weeks to May 20 and had attracted an extra 170,000 customers to its stores, despite dropping market share by 0.1 percentage points to 27.7 percent.  

Analyst ratings update

The 16 analysts offering 12 month price targets for Tesco for the Financial Times have a median target of 265.00p on the shares, with a high estimate of 290.00p and a low estimate of 200.00. As of May 25, the consensus forecast amongst 22 polled investment analysts covering the blue-chip group has it that the company will outperform the market.  

As of 10:42 BST, Friday, 01 June, Tesco PLC share price is 248.20p.

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