Broker snap: Tesco re-rating on the cards

13th Jan 2010 09:06

A 'solid' Christmas at Tesco's UK stores has impressed JP Morgan, which raised its price target on the supermarket chain and promised to review its rating if the performance continues.UK like for like sales in the six weeks to 9 January, excluding petrol and VAT, rose 4.9%, better than the 3.7% predicted by the broker and ahead of the 2.8% reported for the third quarter.As a result, JPM has pushed back its target price date from June to December 2010 and raised it to 390p from 335p. 'We remain Underweight for the moment but acknowledge that trading in the UK is proving better than we expected. If the momentum shown by the latest TNS data is maintained in the next couple of periods, we would review our thesis and rating accordingly,' it said.