Tesco (TSCO)

Sector:

Food Pharmacy Retail

Index:

FTSE 100

388.00p
   
  • Change Today:
      5.50p
  • 52 Week High: 397.00
  • 52 Week Low: 302.10
  • Currency: UK Pounds
  • Shares Issued: 6,648m
  • Volume: 27,554,765
  • Market Cap: £25,796m
  • RiskGrade: 107
  • Beta: 0.01

Broker tips: Volution, Tesco

By Michele Maatouk

Date: Thursday 09 Jan 2025

LONDON (ShareCast) - (Sharecast News) - RBC Capital Markets reiterated its 'outperform' rating on Volution on Thursday, saying it continues to be a standout among its peers.
"We continue to see upside growth potential in FAN with its strong leadership team and dedicated workforce; disciplined approach to acquisitions; continuous improvement and lean manufacturing processes; expansive branded product range; and close customer relationships," the bank said.

"Given its solid performance in recently weaker markets, we expect FAN to continue to outperform as market conditions improve."

RBC said the company's M&A strategy post Fantech now looks more likely to be bolt-on in nature.

It said there is still around £50m of firepower to potentially pursue additional acquisitions.

"We expect these to be focused more on EU markets to expand sales footprint/geographic reach; though unlikely to be anything immediate; and more likely to be bolt-on in nature," RBC said.

"FAN's leverage now sits at circa 1.5x and we could see it go as high as circa 2x if opportunities present themselves. Without additional acquisitions, we expect FAN to reduce leverage by about 0.5x/year, given average cash conversion of more than 90%."

RBC has a 700p price target on Volution.

Shore Capital maintained a 'buy' rating on Tesco after a "decent" trading update from the supermarket group, saying the retailer is well-placed to benefit despite a tough consumer backdrop.

Tesco's share price dipped in morning trade despite the company reporting that sales growth picked up from 2.8% in the third quarter to 3.8% over the Christmas trading period, which Shore Capital said was a "little ahead of consensus".

However, as the broker highlighted, despite a strong top-line performance, full-year profit guidance was unchanged - possibly as a result of additional investments such a 28,000-person increase in seasonal store staff.

"For a worried British shopper, even with rising living standards but hearing news of economic challenges, including rising gilt yields and the potential for tax rises, Tesco is showing that it is on their side, which means that it has probably foregone some scope to beat current market expectations to support ongoing earnings and cash flows," Shore Capital said.

Nevertheless, heading into Thursday's update, the broker said it was not expecting any upgrades to guidance, and that it continues to like the underlying strength of the business.

"Tesco is well set to face into the challenging UK consumer economy, where sentiment is rather weak and forthcoming cost pressures evident. We like the ongoing investment thesis of a cash compounder albeit sentiment and momentum are a little sideways today, but the stock could be a notable relative winner as matters unfold," Shore Capital said.

Email this article to a friend

or share it with one of these popular networks:


Note 1: Prices and trades are provided by Digital Look Corporate Solutions and are delayed by at least 15 minutes.

Note 2: RiskGrade figures are provided by RiskMetrics.

 

Tesco Market Data

Currency UK Pounds
Share Price 388.00p
Change Today 5.50p
% Change 1.44 %
52 Week High 397.00
52 Week Low 302.10
Volume 27,554,765
Shares Issued 6,648m
Market Cap £25,796m
Beta 0.01
RiskGrade 107

Tesco Star Ratings

Compare performance with the sector and the market.
more star ratings
Key: vs Market vs Sector
Value
59.23% below the market average59.23% below the market average59.23% below the market average59.23% below the market average59.23% below the market average
16.67% below the sector average16.67% below the sector average16.67% below the sector average16.67% below the sector average16.67% below the sector average
Price Trend
72.85% above the market average72.85% above the market average72.85% above the market average72.85% above the market average72.85% above the market average
84.62% above the sector average84.62% above the sector average84.62% above the sector average84.62% above the sector average84.62% above the sector average
Income
23.56% above the market average23.56% above the market average23.56% above the market average23.56% above the market average23.56% above the market average
Sector averageSector averageSector averageSector averageSector average
Growth
23.92% above the market average23.92% above the market average23.92% above the market average23.92% above the market average23.92% above the market average
53.85% above the sector average53.85% above the sector average53.85% above the sector average53.85% above the sector average53.85% above the sector average

What The Brokers Say

Strong Buy 4
Buy 8
Neutral 2
Sell 1
Strong Sell 0
Total 15
buy
Broker recommendations should not be taken as investment advice, and are provided by the authorised brokers listed on this page.

Tesco Dividends

  Latest Previous
  Final Interim
Ex-Div 15-May-25 10-Oct-24
Paid 27-Jun-25 22-Nov-24
Amount 9.45p 4.25p

Trades for 30-May-2025

Time Volume / Share Price
16:37 43,280 @ 388.08p
16:37 21,640 @ 388.08p
17:06 100,000 @ 389.10p
16:26 15 @ 390.00p
16:26 16 @ 389.60p

Tesco Key Personnel

CEO Ken Murphy
CFO Imran Nawaz
Chair Gerard Murphy

Top of Page