The information 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 Bank S.A. 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 and as such is considered to be a marketing communication.
Tesco (full-year earnings 12 April)
Expectations are for underlying earnings to hit £1.25 billion, a slight upgrade to the firm’s previous forecast of £1.2 billion. The Booker takeover means that Dave Lewis has to show that the supermarket’s turnaround is well-advanced and also display well thought-out plans for the incorporation of the Booker operations. Sales momentum needs to be maintained, to avoid giving the impression that Tesco has moved on Booker in order to make itself look better, and to cover a stall in the rate of recovery. Still, with 28% of the market versus 16% for rival Sainsbury's, Tesco remains well-positioned overall.
The company’s shares have steadily lost ground since peaking just shy of 220p in December 2016. Rallies have been firmly sold since then, and we remain stuck in a downtrend. The recent low of 182p provides a key support level, and if this is broken then 160p and lower could come into play. A rally must post a close above 200p to indicate firm bullish momentum.
.jpg)
