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Industry leader Tesco (TSCO.L), opens new tab saw sales growth of 5.2% and its market share rose 60 basis points to hit 28.0%, its largest share since December 2017.

I can't see Marshall Wace on the short tracker anymore. Have they closed their position?

Reduced again to .48%

UBS has reaffirmed its 'buy' recommendation on Tesco, with a price target raised from 400 to 410 pence, a new target with 13% upside potential for the stock, the day after the British food retailer's half-year results.

A solid first-half publication and a cautious outlook for the second half point to upside potential in the short term, while the strengthening of alternative earnings sources supports medium-term potential," the broker believes.

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Barclays raises Tesco price target to 405 (375) pence - 'overweight'

Goldman Sachs raises Tesco price target to 420 (370) pence - 'buy'

UBS raises Tesco price target to 410 (400) pence - 'buy'

The contrast with today could not be starker. Thursday’s strong half-year numbers were accompanied by a forecast that the full-year tally for “retail adjusted operating profit”, Tesco’s slightly odd preferred metric, will be £2.9bn, about £100m better than the last time it spoke. Given the group’s recent habit of under-promising, nobody will be surprised if the round number of £3bn is reached

Even so, this has done little to constrain a share price which has risen by 36% over the last year, as compared to a gain of 11% for the wider FTSE100, and by 72% over the last two years. Despite this rally, the shares remain below the longer-term historic valuation, which suggests room for further appreciation. In the meantime, the longstanding market consensus of the shares as a strong buy and the preferred play in the sector is unlikely to waver.

Tesco continues to dominate the British aisles through a mixture of relentlessly competitive pricing and innovation.

At present, the group’s market share remains at 27.8%, which is equivalent to that of its nearest rivals (Sainsbury (J)

SBRY

1.31%

and Asda) combined. Its sheer scale feeds its appetite for lowering prices for customers through the likes of Aldi Price Match, Low Everyday Prices and Clubcard Prices, while a strong focus on significant cost reduction creates something of a virtuous circle.

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In the 26 weeks ended 24 August 2024, revenue grew by 2.9% to £34.77 billion, slightly above estimates, while adjusted operating profit rose by 15.6% to £1.65 billion, comfortably ahead of expectations of £1.53 billion. The strength of this first-half performance has also led Tesco to upgrade its forecast for the full year, where it now expects adjusted operating profit of £2.9 billion, compared to the figure of at least £2.8 billion which it previously guided.

The range of the group’s offering is not limited to the more cost-conscious consumer, and more recently Tesco has honed its upper-end offering, with a subsequent rise of 19.9% in Finest volumes compared to the previous year. It continues to attack the competition on all fronts, with growth of 4.2% in large store sales and a further 9.3% increase in online revenues, which account for 13.5% of the group total. In addition, its Clubcard is now in front of 23 million households within the UK, while its Home & Clothing unit has swung to positive growth of 0.3% after what had been a challenging period.

Inevitably challenges will remain, even though Tesco is on the front foot to face them. Consumers have yet to see the full benefits of falling inflation, although wage increases have offset some of these challenges. The group’s Booker unit reported a dip in sales of 1.9%, largely driven by ongoing tobacco market weakness and lower volumes through its Best Food outlet, although at 13% of overall revenues the impact is more than offset by strength elsewhere in the business.

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At the same time, the group is also bearing down on costs, with a saving in the first half of £260 million leaving the full-year target of £500 million well within sight. Indeed, some of the investment in lowering grocery prices was previously enabled by a parallel concentration on cost reduction announced at the full-year results in April, where £640 million of savings was delivered against a target of £600 million.

The impact of Tesco’s prodigious cash generative ability also feeds through to improving the financial strength of the business. Net debt was reduced by 2% in the period to £9.7 billion, free cash flow for th

Very impressive and going to into the strongest 1/4 of the year

Down to 0.59%

Marshall Wace Llp short position has been reduced again. Good news

​Looking ahead, Tesco faces both opportunities and challenges. The company's retail free cash flow is expected to decrease to £1.4-£1.8 billion due to working capital and cash tax considerations. However, the retail operating profit guidance of at least £2.8 billion suggests potential for upward revision. The disposal of capital-intense parts of Tesco Bank to Barclays, while reducing the expected profit contribution to £80 million, aligns with a strategy of focusing on core retail operations. Additionally, the £1 billion share buyback programme is set to boost earnings per share, potentially enhancing shareholder value.

Sharecast News) - Shore Capital says UK retailers have a reason to be "quite cheerful" after August's strong retail sales data on Friday, with listed supermarket companies likely to benefit from improving macro conditions.

According to estimates from the Office for National Statistics, retail sales volumes rose 1% in August, following an upwardly-revised 0.7% increase in July. Volumes were at their highest levels since July 2022. Analysts, who expected sales growth to have slowed, had forecast a 0.4% increase.

Shore Capital analyst Clive Black said the data provides a "sound base" for the run-up to the key Christmas trading period.

"All in all, there is an encouraging trend line from a volume perspective on the ONS series that records weak winter 2024 activity and ongoing gradual volume improvement through the year, albeit volumes have not returned to the Q2 2022 levels yet," Black said. "All in all, as summer ends, we find this a quite sanguine ONS update for UK retail with the kids back at school and most folks back to work after the summer holidays."

Within this context, Black said grocery stores are "in a good place" and could see a "period of deserved rating expansion".

"We again call out the decent market conditions of the UK grocers where the value of the industry's sales exceeds new space, the market is competitive but rational, the listed players have strong balance sheets that is helping to capture the share gifts from the weak."

Tesco was up 0.2% by Friday morning, outperforming the wider FTSE 100 which dropped 0.7%

The investment bank said in a note that it now sees the shares reaching £4.25, up from their previous target of £3.50, and maintains a Buy rating on the stock.

Citi's updated forecasts are based on the expected strong performance of Tesco in its second quarter of 2025, as indicated by the Kantar data.

“[The] continued UK market share gains [are] expected to be reflected in 1H25 results,” said Citi.

Looking ahead to Tesco's interim results on October 3, Citi said the retailer is expected to achieve a like-for-like sales growth of 3.8% in the UK in Q2, accelerating from the 3.4% growth seen in the first quarter.

The analysts attribute Tesco's success to several factors, including low-single-digit UK food inflation and continued market share gains. Furthermore, Citi expects Tesco's ROI (return on investment) to remain strong, with a projected like-for-like growth of 3.5% in the second quarter.

While the Booker and Central Europe segments are expected to see more modest growth, Citi's overall forecast for Tesco's retail EBIT and free cash flow has been increased.

The investment bank now anticipates retail EBIT to reach £2.867 million in fiscal year 2025, surpassing the company's guidance of at least £2.8 billion.

Additionally, retail free cash flow is projected to be £1.508 million, compared to the company's guidance of £1.4 billion to £1.8 billion.

Citi's positive outlook on Tesco is based on the strong performance demonstrated in recent months, supported by favourable market conditions. The increased price target reflects the investment bank's confidence in the retailer's ability to continue delivering solid results.

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When a Rolls-Royce engine on a Cathay Pacific Airbus A350 caught fire shortly after taking off from Hong Kong last week, the aviation industry’s collective groan could be heard around the world. Shares in Rolls-Royce fell 6.5 per cent as investors worried that its recovery was in jeopardy.

Happily, it appears to have been a false alarm. The problem lay with an easily-replaced fuel pipe, rather than matching the scale of an earlier flaw on the Rolls-Royce Trent 1000 engine for the Boeing 787, which cost £2bn to remedy. That emerged in 2017 and the final part is only now being certified: in aerospace, fixing failures tends to take a long time and be very costly.

Rolls-Royce knows this better than most. There is no finer name in the industry, with an aircraft heritage reaching back to the Eagle engine designed by Henry Royce in 1914. But its recent history is distinctly patchy: it was nationalised in 1971 when it ran low on cash and has struggled to grow smoothly since being privatised in 1987. It has not been a Rolls-Royce operation.

Small wonder that Tufan Erginbilgiç, its no-nonsense chief executive, dubbed the company a “burning platform” when he arrived in January 2023. The Erginbilgiç strategy of culling managers and raising prices has worked: “A hundred times zero is still zero,” is his mantra when faced with internal calls to boost sales by signing low-margin contracts. The share price has more than quadrupled since he came. 

It is a remarkable turnaround. Analysts who have for decades doubted Rolls-Royce’s ability to deliver on its promises have finally turned bullish. Erginbilgiç has briskly imposed private equity-style disciplines on a culture dominated by over-optimistic and financially wayward engineers, and has so far won. “He is a terrific operator, demanding and clear,” says one Rolls-Royce veteran.

Erginbilgiç also had impeccable timing. Not much happens quickly in the industry, and he actually inherited from his predecessor Warren East a platform that was poised for growth, having stopped burning after a critical period during the pandemic. Nick Cunningham, an analyst at Agency Partners, notes that Erginbilgiç is not only a skilled leader but a lucky general.

Two cycles have worked to his advantage. One is the fact that people are flying more. Engines are often sold to airlines on lease-like contracts under which manufacturers guarantee their reliability in return for cash payments based on flying hours. Rolls-Royce makes an initial loss on selling most com

The transfer of wealth from the impatient to the patient

(Sharecast News) - Shares in Rolls-Royce Holdings came under pressure on Friday, after the European air regulator announced an one-off inspection of the UK firm's Trent XWB-97 engines.

The European Union Aviation Safety Agency (EASA) has mandated inspections on the Airbus A350-1000 fleet, which is powered by Rolls-Royce Trent XWB-97 engines.

In particular, it will look at flexible fuel hose connections inside the engines to check for damage, with inspections taking place over the next 30 days. A total of 86 Airbus A350-1000 planes are currently in service worldwide.

EASA said it was a "precautionary measure" following a "serious incident" involving a Cathay Pacific jet earlier this week. On Monday, a long-haul flight to Zurich was forced to return to Hong Kong after an engine problem mid-flight.

Shares in Rolls-Royce were down 2% at 469p as at 0930 BST, having partially recovered from heavier losses earlier in the session.

Cathay is already examining its 48-strong fleet of A350 aircraft following the incident, which reportedly involved an engine fire.

Rolls-Royce said it was working closely with EASA

I would say it is more market volatility US jobs data later. The SP should start ticking up again soon

Lol those Yanks can't really believe this

A representative for Russo and Taylor said: “We intend to vigorously defend these baseless allegations in the court. We expect to demonstrate in court that the current leadership of Chill Brands Group has engaged in a systematic pattern of fraudulent conduct to damage my clients and which has caused significant harm to the investors of Chill Brands Group.”