Deutsche Bank has cut its forecast for Tesco PLC's second-quarter UK sales growth ahead of half-year results, but expects profits to stay on course.
The broker now expects like-for-like sales, which strip out the effect of new and closed stores, to rise 1.7% in the UK, down from 2.2% previously.
Analyst Benjamin Yokyong-Zoega said the cut reflected softer market data.
Comparisons with last year should become easier in the second half, he added.
Deutsche Bank forecasts adjusted operating profit up 3% to £1.725 billion for the 26 weeks to 28 August.
Tesco reports on 8 October.
The broker thinks the UK's largest supermarket group could narrow its full-year guidance for operating profit of £3.0 billion to £3.3 billion.
Tesco's market share is slipping slightly after outsized gains last year, though the comparisons ease from November.
Food inflation remains subdued but is edging up as energy, fertiliser and climate pressures build.
Deutsche Bank expects those costs to feed through gradually, as hedging along the supply chain cushions the impact.
It believes Tesco is well placed to cope, thanks to its scale, competitive pricing, own-label ranges and room to improve margins.
The shares trade on 15.6 times forecast 2026 earnings, with a free cash flow yield of 6.6%.
Deutsche Bank kept its 'buy' rating and 525p price target, which implies 10% upside from Thursday's close of 477p.
