Deutsche Bank Bullish On Tesco

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Deutsche Bank Bullish On Tesco

Deutsche Bank Is Bullish On Tesco Shares

The Tesco stock shows that its price is on a rampage as of late. To give you some perspective, the market cap of Tesco has declined by almost 20%.

As of now, the grocery retail sector of the UK remains highly competitive. So, it makes sense for Tesco to struggle every now and then. But despite the recent setback, Tesco still has 28.3% of the market share.

Tesco Share Price To Touch 440p

Also, the product volume growth and the like-for-like sales of Tesco have also exceeded expectations. In simple words, that's 1.75 billion worth of free cash flow.

Overall, things look positive for Tesco from a fundamental point of view. Meanwhile, the management has lowered its yearly guidance for the operating profits.

Now, that's the sign which was not taken positively by the market forces and led to a decline in the share price of Tesco.

According to Shore Capital, this is actually beneficial for Tesco. It gives it a much-needed flexibility to stay competitive if the company has to lower its prices.

Also, the analysts at Deutsche Bank have shared their forecast for the Tesco shares. They have set a 440p price target for Tesco during the next 12 months.

Meanwhile, the Jefferies analysts are not that optimistic and have set a price target of 350p. Overall, the average forecast for the Tesco shares during the next 12 months is around 387p.

Based on the current trading price of Tesco, the bullish forecasts made by the experts don't look too good at all. But if Tesco can manage to increase its market share and even compete in a pricing war, it could also translate into good performance in the stock market.

The forecast also highlights that Tesco is facing multiple challenges and it is definitely not easy to compete in such a fierce market. But even then, Tesco remains a key player with market share that's the highest in almost a decade.

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