What to expect from Tesco’s Q1 trading statement
All eyes are on Tesco as it issues its Q1 update, with the shares looking for a catalyst for a new push higher. Meanwhile, while Morrisons shares are edging up, the chart for Sainsbury’s seems stronger.
When is Tesco’s trading statement?
Tesco is expected to provide an update on its current trading on 18 June.
Tesco statement – what to expect
Tesco saw quarter one (Q1) sales rise 7.9% a year ago, which means the bar has been set quite high in terms of comparitives. Like-for-like sales rose 6.3% across the whole group for the year.
As the supermarkets begin to publish their numbers, it is becoming increasingly evident that the 2020-2021 period was an outlier, and that 2019-20 will be more of the proper comparison for the coming year. As lockdowns ease (mostly), the surge in online shopping will slow, if not reverse entirely, while some of the old habits of small, regular shops rather than one big weekly shop as we saw in 2020, will make a return.
Food price inflation will be another element to watch, and for Tesco as well as its peers the impact on margins will be the important element. A highly-competitive business, most price increases will have to be absorbed by the supermarkets themselves, rather than passing increases along to consumers, since that risks losing customers.
Tesco shares – technical analysis
Tesco shares have gained steadily since late April, and continue to target highs from earlier in the year. A dip to the 215p level found buyers in late April, as it did in early March, and with the price having cleared 230p the buyers appear to be in charge. A close below 220p would begin to reverse this view.
What about the others?
Morrisons has struggled to make headway since the end of March, when a rally to 180p ran out of steam and a dip to 167p took place. A second bounce in May to 180p also hit resistance, and we have seen a descending channel form since then which continues to contain any upside. Buyers will want to see a rally back to 180p that then breaks higher, while sellers will hope that a turn lower below 178p takes place to maintain the downward channel.
For Sainsbury’s the chart is more promising – after breaking out of a bullish wedge in February the price has found renewed bullish momentum, taking the price to a new two-year high. Recent weakness appears to be contained above 250p, with the upward channel so far firmly intact.
This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.
Act on stock opportunities today
Go long or short on thousands of international stocks with CFDs.
- Get full exposure for a comparatively small deposit
- Trade on spreads from just 0.1%
- Get greater order book visibility with direct market access
See opportunity on a stock?
Try a risk-free trade in your demo account, and see whether you’re on to something.
- Log in to your demo
- Try a risk-free trade
- See whether your hunch pays off
See opportunity on a stock?
Don’t miss your chance – upgrade to a live account to take advantage.
- Trade a huge range of popular stocks
- Analyse and deal seamlessly on fast, intuitive charts
- See and react to breaking news in-platform
See opportunity on a stock?
Don’t miss your chance. Log in to take advantage while conditions prevail.
Live prices on most popular markets
- Forex
- Shares
- Indices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
