Tesco PLC is performing well and looks likely to maintain its leadership of the sector, says Credit Suisse, which upped its share price target for the grocery chain.
The new target has been set at 306p (previously 283p) and the investment bank has maintained its ‘outperform’ rating.
Last week, Tesco announced its revenue for the first six months of the year of GBP30.4bn, up 5.9%, accompanied by a 28% increase in operating profits to GBP1.3bn.
Credit Suisse believes Tesco is “is well-positioned to maintain market share and with its industry-leading margin, be able to generate enough cash to fund capex and shareholder returns.”
Credit Suisse attributes the upgrade in share price target to the stock trading at a relatively low valuation, not facing difficult comparative numbers from last year, and improving communication.