Tesco PLC (LSE:TSCO) has shown its strength in holding onto market share in the first half of the year and with management confident about the upcoming festive season, analyses at UBS and Citi were upbeat.
UBS lifted its price target to 500p from 475p, and compared to last week's closing price of 448.7p, saying the FTSE 100 supermarket group remains a “high-quality, defensive business with a widening moat from a positive productivity loop”.
The Swiss bank expects further upgrades, raising its earnings forecasts for the 2026 and 2027 financial years, and highlighting evidence of strong customer traction as Tesco “almost matches Aldi on Net Promoter Score” and now ranks “#1 for the most attractive prices”.
After spending some time with Tesco management, meanwhile, Citi said the team was exuding confidence about “a good Christmas” despite muted consumer sentiment.
This is helped by strength across its Finest range and convenience services
“Management feels that their market share gains have been as much from price investment as investments in availability, experience, and service,” Citi said, with the ability to defend against Asda “driven by this willingness to invest on price without compromising on any other aspect of the shopping trip.”
Tesco’s rapid delivery service Whoosh is also gaining ground, “on track to be a £400m business this year,” and now the UK’s third-largest quick commerce operator.