Broker snap: Credit Suisse flags Tesco buying opportunity

28th Jun 2013 16:10

Broker Credit Suisse has flagged that Tesco is now the lowest-rated large-cap food retailer in Europe and it sees signs of recovery. Having noted that Tesco shares now trade back at their January 2012 profit warning level, a 10-year share price relative low, analyst Andrew Kasoulis said "something(s) must get better" soon.The analyst highlighted UK food, Korea and Thailand as key areas that might spark the shares.The broker's analysis showed UK food like-for-likes (LFL) were positive in Q1 before including horsemeat effects and "we think food, not overall LFL, will be the key UK key performance indicator now Tesco is downsizing some non-food".In Korea, comparative figures from the prior year ease substantially from here on in and "assisted by regulatory clarity, we expect performance to improve", while in Thailand a disappointing first quarter "will prove a temporary dip". "We do not expect all to turn immediately," said Kasoulis, "but some improvement before end-2013 would be a catalyst for the shares." Shares in Tesco were essentially flat, down 0.1% at 333.12p at 16:25 on Friday.OH