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(Sharecast News) - Shore Capital has reiterated its 'buy' rating on Tesco ahead of the supermarket's first-quarter results next week, though it doesn't expect any big positive surprises with the company facing tough comparatives with last year.
"We sense that Q1 trade will be sound but not effervescent, so mix, operating costs, where there are new pressures due to Iran, and productivity programmes take on importance," the broker said in a research note on Friday.
Trading conditions were "excellent" during the spring and summer of 2025, the broker said, with Tesco benefiting not just from warm weather but also the impact of cyberattacks affecting competitor operations and better consumer confidence.
Tesco's stock, meanwhile, has come off its recent highs lately due to a weaker macro outlook.
"Tesco stock was testing new highs, deservedly to us as an effective cash compounder, and so we understand the sentiment behind the recent mark down," the broker said.
"On reflection, though, we still see a stable, defensive, asset-backed retail powerhouse, with a strong financial constitution, good capital allocation, and excellent execution. For the medium-to-long-term investor, we, therefore, reiterate our 'buy' stance."
Shares were broadly flat at 468.8p by 1051 BST.
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