Connect with us

Hi, what are you looking for?

Oracle of  Omaha Says – Investing and Stock NewsOracle of  Omaha Says – Investing and Stock News

Editor's Pick

As the Tesco share price loses steam, is it a good retail stock?

Tesco (LON: TSCO) share price has pulled back after soaring to the year-to-date high of 277.8p earlier this month. The stock was trading at 267p on Wednesday after the latest UK inflation data and after the spectacular results by Marks and Spencer. 

M&S earnings and UK inflation data

The biggest UK retail news on Wednesday was the upbeat results by Marks and Spencer. In a statement, the company said that its profit before tax came in at £482 million in the year to April 1. Its statutory profit before tax jumped to £475 million. As a result, the company decided to restart paying dividends, citing the improving business conditions.

The positive results by M&S is a sign that other British retailers like Tesco are also doing well even as the cost of living crisis continues. In April, Tesco’s preliminary results showed that the company’s annual sales jumped to £57.6 billion while its adjusted operating profit dropped to £2.6 billion. The company also reduced its net debt slightly.

The other important catalyst that moved the Tesco share price was the latest UK inflation data. According to the Office of National Statistics (ONS), the headline consumer price index dropped from 10.1% in March to 8.7% in April. Core inflation, which strips the volatile food and energy products, rose from 6.2% to 6.8%. The two figures rose on a month-on-month basis.

Tesco, as the biggest retailer in the UK, is usually impacted by inflation figures. For one, the company is seen as the home to affordable products. As such, it usually attracts customers seeking for bargains. Also, the company could benefit as it adjusts its pricing.

Analysts are generally bullish on Tesco stock. Those at Shore Capital recently reiterated their bullish outlook of the stock. Similarly, those at JP Morgan and Jefferies also upgraded their targets to 290p and 310p, respectively.

Tesco share price forecast

Tesco chart by TradingView

TSCO stock price has made a spectacular recovery in the past few months as it jumped from last year’s low of 190p to a high of 277.7p on May 9. As it jumped, the shares approached last year’s high of 281.1p. It also moved above all Fibonacci Retracement levels. It remains above the 25-day and 50-day exponential moving averages (EMA).

Therefore, despite the recent pullback, I believe that the shares have more room to climb in the next few months. This rally will be confirmed when the stock moves above the year-to-date high of 277p followed by last year’s high of 281p.

The post As the Tesco share price loses steam, is it a good retail stock? appeared first on Invezz.

Enter Your Information Below To Receive Free Trading Ideas, Latest News And Articles.

    Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

    You May Also Like

    Editor's Pick

    Everynet, one of the world’s largest network operators for national LoRaWAN® networks, announces it is working with Amazon Web Services (AWS) to offer long-range...


    As more candidates throw their hats into the 2024 Presidential ring, I’d like to offer a proposal that should have immediate bipartisan support: stop...

    Editor's Pick

    The Internet of Things (IoT) is changing the way we interact with technology, and it has the potential to revolutionize the way we manage...

    Editor's Pick

    Semtech Corporation and esteemed engineering design services firm, Connected Development, today announced the launch of the new XCVR Development Board and Reference Design integrating...

    Disclaimer:, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2023