The City is not highly bullish on Tesco in today’s economic climate. This is understandable. However, could the market be discounting an overly-negative economic outcome?
Compared to a year ago, only half of the investment community are still maintaining a ‘Outperform’ rating on Tesco (12 to 7); while 6 brokers have put out a ‘Hold’ recommendation on the stock. And, only 3 analysts are issuing outright ‘Buy’ recommendations for Tesco.
However, market sentiment can change swiftly. Tesco has rebounded sharply from 200p and perhaps analysts may find themselves missing out the rally.
Out the 11 price targets for Tesco, the median level is 270p, which is not too far from current prices. Perhaps one should wait for a consolidation to buy into the grocery stock.
Source: Financial Times
Like most other shares, the best time to accumulate Tesco shares is when they are down.
The question is when? If we take a glance at Tesco’s chart, around 220p may not be a bad level – although I would prefer to add at a lower level.
In mid-2022, Tesco’s share prices corrected sharply from 300p. That pessimism was caused by the shock rise in energy and food prices, which led to fears of a massive profit margin contraction. But support buying has emerged at around the psychological 200p level. Perhaps the worst is over for Tesco shares.
Investing is about taking calculated risks. If one intends to buy Tesco shares for the long term, a scheduled purchase may work out better as entry price is averaged out over the ups and downs of a stock.
Jackson is a core part of the editorial team at GoodMoneyGuide.com.
With over 15 years industry experience as a financial analyst, he brings a wealth of knowledge and expertise to our content and readers.
Previously Jackson was the director of Stockcube Research as Head of Investors Intelligence. This pivotal role involved providing market timing advice and research to some of the world’s largest institutions and hedge funds.
Jackson brings a huge amount of expertise in areas as diverse as global macroeconomic investment strategy, statistical backtesting, asset allocation, and cross-asset research.
Jackson has a PhD in Finance from Durham University and has authored nearly 200 articles for GoodMoneyGuide.com.
You can contact Jackson at jackson@goodmoneyguide.com
