Credit Suisse yanks up Tesco share price target

Tesco looks set to stay at the top of the grocery food chain as Credit Suisse raised the supermarket’s target share price.

According to Proactive, the new target is up 8.1 per cent from 283p to 306p.

It comes after Tesco revealed last week that its operating profit had soared by almost 30 per cent to £1.3 billion.

The retailer also closed the book on a seven-year-old accounting scandal, agreeing a £193 million settlement with a group of shareholders.

READ MORE: Business rates hurt ‘levelling up’, says Tesco boss

Its results, plus speculation over a private equity takeover, saw its share price peak at its highest point since February at 276.7p on Friday.

Credit Suisse maintained its “outperform” rating.

Tesco is “well-positioned to maintain market share… generate enough cash to fund [capital expenditure] and shareholder returns”, it said.

Kantar data from 3 October shows the grocer accounts for 27.4 per cent of grocery sales in the UK.

Catherine Shuttleworth, founder of retail agency Savvy, stressed that Tesco’s Aldi Price Match was a key reason for its success.

“Tesco reassured people that shopping with them means you can have all the benefits of Aldi pricing with all the benefits of the Tesco range,” she told the Retail Gazette yesterday.

“It’s been an important factor in driving customer numbers and switch.”

She added that its Clubcard Points loyalty scheme provides “valuable benefits to shoppers which makes them more committed to the Tesco brand”.

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