Management of Tesco PLC (LSE:TSCO) is 'distinctly on it', according to Shore Capital, which hosted a meeting with management of Britain's largest grocer.
This positive feedback from a brokerage, which has a strong track record in retail, allied to a price target hike by UBS helped provide some support for the share price, which was up 1.4% mid-afternoon.
Shore in a note to clients said: "All in all, following another excellent exchange with Tesco’s CFO and IR team, we feel all the more confident in stating that the firm is in very good shape, justifiably self-confident whilst switched on, in greater control of its own destiny within an industrial context where we believe the outlook is brighter, not darker."
UBS, meanwhile, sees the potential for the "first time in many years" for margin expansion. Tesco has become much more competitive and efficient in recent years, leading to increased market share over the past year in a stable market with limited competition, the Swiss bank contends.
Looking ahead, it believes the supermarket giant can improve its profit margins for the first time in years, turning a steady 3% annual sales growth into 5-6% annual profit growth and over 11% earnings growth per year over the next five years.
Tesco remains UBS's top investment choice with a 'buy' rating and 400p price target, up from 330p previously.
In afternoon trading the stock was up 5.1p at 361.2p.