The Tesco share price rose for the second straight day as European equities rebounded. The FTSE 100 rose by more than 0.20% while DAX and Stoxx 50 rose by 0.16% and 0.45%. The shares are trading at 234p, which is still in the same range where it was in the past few weeks. It has a market cap of more than $24 billion.
Tesco news. The Tesco stock has underperformed that of other top retailers like Sainsbury’s and Morrison’s. This performance is mostly because of the fact that Morrison’s has become a takeover target while many investors are speculating that Sainsbury’s too could receive an offer.
Asda, the third-biggest UK supermarket has already been acquired by a private equity firm and Issah brothers. Because of its size, many investors believe that it will not receive an offer.
The Tesco share price has also struggled as investors pay a close attention to the company’s business as the UK economy recovers. With the country reopened, they are waiting to see whether the firm will keep doing well. This is after its first quarter revenue increased by about 1% to 13.36 billion pounds.
Meanwhile, analysts are bullish on the company’s stock. Most of those who follow the company have a buy or overweight rating. For example, this year, analysts at Shore Capital, Berenberg, and Barclays have all reiterated their call. They expect that it will rise to more than 280p, which is significantly higher than the current level of 234p.
Tesco share price forecast
The 1D chart shows that the firm’s shares have formed a horizontal channel whose support and resistance levels are at 221p and 234p, respectively. Early this month, the stock managed to move above the resistance level and then rose to 240p. It then resumed the downward trend and reached 229p. This could be a sign that the stock formed a break and retest pattern.
Therefore, while my view of the stock is neutral, there is a possibility that it will break out higher. This view will be confirmed if it manages to move above 240p. A decline below 230p will be a bearish signal.