Tesco’s (TSCO) share price closed at multi-year highs on Tuesday as the market takes a bullish view of UK consuming spending this Christmas.
Meanwhile, a few of its rivals – Morrisons (MRW) and Asda – are engaging in mergers and acquisitions (M&A). Corporate takeovers, especially ones fuelled by incurring huge debt, are always a messy affair that will take some time to sort out. This leaves Tesco to grab more market share.
Marks & Spencer (MKS) fantastic results today shows that life on the High Street is not yet over despite the lingering pandemic. Its share price is up by 15 percent this morning.
At the time of writing, Tesco’s share price is up by 1.5 percent.
Tesco share price (TSCO) is extending its bull run into the vicinity of the 300p area.
What is interesting is that the spike on October 6 did not result in a deep pullback. This suggests that investors are continuing to accumulate the stock at current levels.
Trendwise, Tesco is still bullish and on track to trade higher in the weeks ahead. The key level to watch for is at the round number level at 300p where a consolidation may occur there.
On a longer time scale, Tesco remains at the bottom half of its range (the upper half is 300-475p). This suggests that more upside can be expected in the years ahead, although one really have to be patient to await a rally that far.
Tesco share has been rising for some time this year. However, despite this most analysts have taken a bullish view on the company.
In particular, out of a panel of 18 analysts tracked by Financial Times, 15 are recommending the stock as ‘Buy’ or ‘Outperform’. This is quite a positive consensus. The highest price forecast is 345p; and the lowest is 200p.
The dividend yield of 3 percent is also attractive for income investors. Further boost market sentiment towards the stock is the £500 million share buyback, a move that will help to boost earnings per share.
Tesco share price shot up on Wednesday following a set of better-than-expected results.
The latest Interim Results released today shows Tesco’s group revenue rose by 2.6 percent to £27.3 billion. More impressive was the 40 percent jump in the operating profits. The last six months saw Tesco’s retail and financial divisions made a combined £1,458 million. Majors contributing factors to Tesco’s sales surge included the Euro 2020 football tournament and the ‘staycation’ trend.
Ken Murphy, the CEO of Tesco, commented that “we’ve had a strong six months, and we’ve outperformed the market.” The supermarket is now expected to “generate between £1.4bn and £1.8bn retail free cash flow per year.” The company’s cash position is strong enough to support a £500 million share buyback.
Tesco’s result also allayed concerns about the recent supply chain issues in the country.
At the time of writing, Tesco’s stock rose by more than 4 percent and topped the FTSE 100 leaders board.
Tesco share price is poised for a breakout. So far this year Tesco has been trading in a tight range. But the pattern of rising lows – a bullish formation – is easily observed from its weekly bar chart.
If Tesco is able to hold onto the rally above 260p, a long-term breakout is a strong possibility. If this happens, the next upside target is estimated at the round number level at 300p.
Added to the fact Tesco is a defensive stock. Any market wobbles caused by a spike in inflation could improve Tesco’s relative strength.
As Tesco’s latest results shows, the grocery company is a quality blue-chip company.
Its 4,600+ stores generates billions of free cash flow annually. Revenue is growing; net debt is falling. Dividends are stable. Furthermore, a new share buyback program may help to buoy the stock’s return.
Unsurprisingly, the number of analysts recommending the stock has increased. The panel of broker recommendations tracked by the Financial Times shows 60 percent of the brokers rate Tesco as ‘Outperform’.
This means that consensus is bullish on the stock.
Source: Financial Times
Tesco share price is steady in late morning trades as the energy crisis gradually subsides.
In fact, the fuel crisis is now ‘back under control‘ as one government minister said this morning. Petrol stations are being refilled again and there is no need to panic buy fuel.
While the energy crisis has lasted only a few weeks, the damage to the economy may be long lasting. So much so that macro traders are dumping Pound Sterling.
Cable (Sterling-US Dollar), for example, slumped to its lowest level this year. Should the energy crisis flare up again, another leg down is possible.
Turning to Tesco, investors remain sanguine about the supermarket’s near-term outlook. Tesco’s supply chain is still distributing products to its stores without significant delay.
Chartwise, Tesco is maintaining the multi-week uptrend but a fall below 250p may break the progression of rising lows.
Tesco’s share price rebounded slightly in late morning trades as the fuel crisis eases slightly.
The government said today that a fleet of reserve tanker fleet will be on the road to relief the fuel crisis. However, a number of petrol forecourts, including Tesco’s, are still experiencing fuel disruption.
Until the drive shortages is solved, the fuel supply will stay disrupted for the time being.
However, the market is not expecting in a meaningful drop in Tesco’s revenue due to the fuel crisis. Its share prices have remained steady through the past few sessions as investors bought dips. This maintains prices near the 260p level.
Tesco share price slipped further on Wednesday as the fuel crisis deepens.
As the fuel crisis escalates, supermarkets are expressing reassurance the their fuel supplies are adequate. A Tesco spokesman said yesterday, “We have good availability of fuel, and we’re working really hard to ensure regular deliveries to our petrol filling stations across the UK every day”.
The next important issue is, will the fuel crisis disrupt the delivery of goods across Tesco’s 4,000 stores in the UK? At this point, it is still too early to estimate how will the energy crisis hit Tesco’s overall sales.
Meanwhile, fast-growing Aldi is set to expand further in the UK with more than 100 new stores in the pipeline. This will intensify the competition among major retailers.
Tesco’s share price started the week firmly, but the growing fuel crisis is hitting sentiment towards the sector.
Investors are eyeing the unfolding fuel crisis with great interest. So urgent is the issue now that the government is considering deploying the army to help distribute petrol across the country.
Panic buying and dwindling supplies have brought back memories of toilet paper shortages in the spring of 2020. But an energy crisis is far more serious. It is the lifeblood of the modern transport system. Coupled with driver shortages, a lack of fuel can cause serious harm to the UK supply chain.
How will this hit Tesco? One potential impact is lower fuel sales, although this depends on the length of the crisis. For the moment, analysts and brokers could not fully quantify the negative impact on Tesco’s bottom line.
At pixel time, Tesco’s share is trading slightly beneath the resistance at 260p.
Tesco’s share price is holding firm above 260p on Thursday morning as sentiment returns.
In share trading, macro factors can sometimes dominate the market. An example is the indiscriminate selling earlier this week. Traders de-risked frantically due to a potential credit event in Asia.
On the other hand, share prices themselves can sometimes generate much excitement. A rising stock price creates an upward momentum that instantly appeals to traders and investors alike.
Tesco’s stock price is on the cusp of creating one such bullish breakout that will certainly attract a lot of buying attention. For years the stock has been stuck below the 260p ceiling. Many times the stock attempted to clear this level, but without success.
As the stock now trades at 260p, there is a chance that this resistance will be broken in the near future. If successful, even a casual trader knows that when prices will rally further.
Tesco (TSCO) share price extends its recovery rally on Wednesday as investor confidence rebounds.
While headlines are continuing to focus on the CO2 crisis, investors shrug off these news and ignore any potential impact of the gas crisis on the grocery sector.
Right now, traders are not expecting much disruption to Tesco’s trade in the run-up to Christmas – although such confidence can be dented suddenly should food producers fail to deliver.
On the more bullish note, we observed that recent market setbacks have not jeopardised Tesco’s rising price trend. This is a good sign as there is no heavy selling here.
Tesco share prices has now rebounded to its near-term ceiling at 260p. An upside breakout is possible if the stock market swings back into a buying mode.
All eyes are watching what the Fed will do today, perhaps outlining the taper schedule.
Tesco’s share price rebounds on Tuesday morning as market sentiment turns less negative.
While the the food industry is predicted to be disrupted from high energy prices, it appears investors are brushing off these concerns.
Supermarket stocks have rebounded from their near-term lows. Sainsbury (SBRY) have found support at 280p after a sharp decline from 340p. Tesco’s share price are trading near its long-term highs at 260p.
UK’s number one supermarket is the sector laggard because of a lack of M&A excitement. That said, the grocer is a quality defensive stock with a fairly chunky dividend yield of 3.9%. Never underestimate the power of compounding from re-investing these dividends.
In light of the growing market uncertainty, Tesco could offer some stability in one’s portfolio.
The Tesco (TSCO) share price dipped in early morning trades due to the weak market sentiment. Being a defensive consumer stock, Tesco is holding up better than other sectors.
But a relevant issue is being raised this week: Will supermarket run low on frozen food supplies in the run up to Christmas?
The catalyst is the recent spike in wholesale gas prices. This led to closures of fertiliser plants as higher energy prices makes production unprofitable. In turn, supplies of some industrial gases like carbon dioxide plummeted as these fertiliser plants sells CO2 as byproducts.
CO2 is used in the cold supply chain (refrigeration). Without it, frozen food products would be hard to transport.
With less than 100 days to Christmas, food producers are now scrambling to solve the issue. Talks with government are underway to ease the looming food supply crisis.
Tesco share price remains steady but could weaken if its food supplies are threatened.
Source: The Guardian
Tesco share price is holding firm in spite of the latest drop in retail data.
Data released today shows UK retail sales over July-August fell by 0.9 per cent. This is the fourth consecutive monthly drop in consumer spending.
Given the significance of retail spending in the UK economy, many are wondering if the economic rebound from the re-opening has ended. Food store sales dropped by more than 1 percent while fuel sales rose 1 percent, perhaps reflecting the trend that consumers are spending more on travelling.
For Tesco, the overall outlook remains stable. But if consumer spending were to drop further into the golden quarter, it would suggest serious troubles in household income. For now, the market is expecting a spending rebound as we head into the New Year.
Tesco’s share price is trading at the top of the range and encountering resistance at 260p.
The Tesco share price rose today, as is inflation, fast. From electricity prices to food to raw materials, the cost of everyday essentials are rising at a rate exceeding the market’s forecast.
Just this week, the Office for National Statistics revealed that the UK Consumer Price Index inflation leapt to 3.2 percent in August annualised. This is the most significant increase since 1997.
The components rising the fastest are transport, restaurant and hotel. Others are rising less, but nonetheless, showing an uptrend quarter to quarter.
This leads to the question – will the rise in cost erode the grocers’ margins? The first thing food producers deal with inflation is to shrink their products, ie ’shrinkflation’.
For Tesco, the impact of inflation on profits is more complicated because the supermarket can shift products around the shelves. For example, a few years ago when Unilever decided to increase the price of Marmite, Tesco removed these products from the shelf to protect its margin.
However, if inflation does get out of hand, Tesco will have to pass on the cost to consumers in a measured fashion to protect its market share. Not necessarily bad, as nominal profits may even go up.
Offers for Morrison’s (MRW) shares reached a remarkable £9.7 billion on determined private equity houses. Sainsbury (SBRY) also enjoyed a sharp rally this year on whispers of a potential bid.
For the Tesco (TSCO) share price, UK’s largest supermarket, it may be beyond the reach of all but the largest private equity players. For one, its market cap before any takeover premium is nearly £20 billion. Any bidding war will lift that sum significantly higher. Taking on such a giant will not be an easy task. Regulatory hurdles will also be formidable.
For the moment, the market is not expecting any shootout for Tesco. Nonetheless, the stock is lifted by buoyant takeovers spirit in the sector. Watch for a breakout above 260p.