Like many of its customers, the Tesco share price has spent much of 2021 in lockdown. As it rallies from the lows, we ask, is there more to go?
Tesco, the world’s third-largest retailer by gross revenue, has a footprint many of its rivals would dream of. However, its share price is hardly the envy of its peers.
Since its 2007 peak of 495p, it has shown investors a negative return of -54%. The Tesco share price has managed to woefully underperform even the FTSE 100’s paltry +9.5% return over the same period.
Of the 14 analysts offering a 12-month price forecast, the lowest prediction is 263.47p. This reflects a 17% increase from the current 226.43p price. At the top-end of the range sits an optimistic 399p price target, some 77% higher than the last trade.
The Global pandemic has certainly boosted sales at the U.K headquartered retailer. On its 14th April first-quarter earnings call, the supermarket giant revealed sales exceeded GBP 1 Billion per week during the first 3 months of the year.
The increase in sales revenue was more than offset by virus-related costs, with profits declining by -19.7% for the period.
As the U.K economy moves out of lockdown, there may be brighter times ahead for the Tesco share price, and bank analysts agree.
Hargreaves Lansdown gave an upbeat assessment of the earning call, saying:
‘The stage is set for a strong earnings recovery once the pandemic passes.’
This view was backed by Jeffries, who reiterated their ‘buy’ reccomendation with a target of 310p.
Tesco Technical Outlook
On the 4-hour chart, we can see that the Tesco share price has found buyers below 220p per share. Recent moves below this marker have seen the price find a base before recovering.
In December, the price traded higher by +14% from its 219.10p low. And again, in November, we saw a +10% price rise from a 217.10p low.
The first target on the upside is 231.30p, where the price meets a descending trend line in place from the 27 of January high at 250.70p. A break of which could see the price extend to 2021 highs. This would mirror December’s +14% rise from the support area.
A break below the recent area of support at 217p will negate the bullish outlook.