Though it ironically cooled over the UK’s sweltering summer, 2018 has been a pretty decent year for Tesco. Opening at £2.09, the stock struggled to get anything going during the first quarter, constantly hitting a ceiling of £2.10. That all changed in April, however, as the firm’s full year results propelled the company higher.
The good vibes continued all the way until mid-August, when the supermarket struck a 4 year peak of £2.67. Yet from that point onwards the stock began to struggle, with retail sector-wide concerns dragging it to a 5-ish month low of £2.33 in mid-September. Tesco PLC now sits at a current trading price of £2.44.
Contributing to that aforementioned rise was June’s first quarter update. Group like-for-like sales rose 1.8%, with a 3.5% surge in the UK and Republic of Ireland, marking a 10th consecutive quarter of growth. The main reason for these extra-impressive figures was the first-time inclusion of Booker, with like-for-likes at the division up a very healthy 14.3%.
Since then Tesco has made a pretty big announcement, if one that failed to do much for it market-wise. September saw the supermarket reveal its Aldi/Lidl-challenger Jack’s, a discount chain designed to stymie the threat posed by the German upstarts, with 10 to 15 locations planned on top of the initially opened stores in Chatteris, Cambridgeshire and Immingham, Lincolnshire.
It is way, way too early for any substantial update on Jack’s, though investors no doubt would still like to hear a comment or two on how the initial stores are performing. As for the interim results themselves, the second quarter period covers the World Cup and peak heatwave, things that should allow Tesco to maintain, and ideally improve on, the strong growth posted in Q1.
Tesco PLC (LON:TSCO) has a consensus rating of ‘Buy’ alongside an average target price £2.61.
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