Broker snap: Cracks appearing at Tesco

6th Oct 2009 12:52

The market seems to have had difficulty deciding what to make of the results from Tesco announced on Tuesday morning, but ETX Capital is convinced cracks are beginning to appear in the supermarket giant's money making machine.'Despite a net first half profit in excess of £1bn and a hike in their dividend, the much lauded US expansion has yet to prove profitable,' ETX analyst Manoj Ladwa notes.With the supermarket business losing share to Sainsbury and with declining food prices likely to put pressure on margins, Tesco may have to look at other areas 'if it is to offer growth and value to shareholders,' ETX reckons.