2018 was very much a tale of 2 halves – ish – for the UK’s grocery behemoth. Up until early August the stock was going great guns, rising from a starting price of £2.09 to a 4 year-plus peak of £2.67. Since then, however, the firm has been stuck in the reduced aisle, tumbling to £1.90, its worst price for 13 months, by the year’s end.
Early 2019 has seen it rebound somewhat, with a positive Christmas statement from Morrisons (LON:MRW) helping drum up some optimism for the company’s own update. Tesco PLC (LON:TSCO) now sits at a current trading price of £2.09.
The supermarket’s last statement came all the way back in October, when it posted its interim results. There it revealed a Booker-boosted 12.8% surge in group sales to £28.3 billion, alongside what was seen as a disappointing 2% jump in pre-tax profit to £564 million. There were also concerns over profit margins; Tesco said it is expecting Group operating margins to be between 3.5% and 4.0% by 2019/20, not the firm 4.0% analysts had hoped for.
Perhaps more importantly, UK and Republic of Ireland like-for-like sales rose 3.8% across the half year, with a 3.5% increase in Q1 and a 4.2% leap in Q2. For the UK specifically, LFLs rose 2.1% and 2.5% in those respective quarters, and 2.3% for the half as a whole.
As for Thursday’s post-Christmas shopping trip, analysts are looking for a 1.3% increase in like-for-likes over the 6 weeks to January 5th, as well as a slightly less impressive 0.8% rise in total Q3 comparable sales.
Tesco PLC(LON:TSCO) has a consensus rating of ‘Buy’ alongside an average target price of £2.64.
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