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(Sharecast News) - Deutsche Bank lifted its price target on Tesco to 550p from 525p on Friday after the supermarket chain upped the lower end of annual guidance and its share buyback programme a day earlier, as it posted a rise in interim profits.
The bank said its continues to view Tesco as a "best-in-class" operator in UK grocery.
"We are particularly encouraged by the resilience of earnings, despite subdued UK LFLs," DB said.
"Profit growth is increasingly supported by a combination of favourable sales mix (e.g. Finest +8.9%), cost savings and ancillary income streams such as high-margin retail media," it said. "Importantly, this is not coming at the expense of competitiveness with customer satisfaction at a record high."
DB said that against a potentially weaker UK consumer, Tesco's scale advantages, strong balance sheet and value credentials leave it well positioned for outperformance.
Deutsche maintained its 'buy' rating on Tesco.
At 1426 BST, Tesco shares were 1% higher at 505.20p.
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