Tesco boosted by Cantor Fitzgerald upgrade to 'buy'

14th Jul 2014 15:22

Tesco's share price received a boost on Monday after analysts at Cantor Fitzgerald raised their rating on the stock from 'sell' to 'buy', saying that the stock is undervalued compared to others in the supermarket sector.The broker hiked their target for the shares from 282p to 325p and said that the shares are trading at a 35% discount to those of rivals J Sainsbury and Wm Morrison.Cantor said: "This [upgrade] reflects our view that Tesco UK is 35% undervalued compared to its UK peers and that Tesco's reconfiguration of its UK operations could, in our view, be successful in recapturing the shifting customer base in retail."While online and convenience sales are seen to be growing ahead of the market, the broker said that the first half of the current financial year could mark a "low point" for operations in the UK. However, new Chief Financial Officer Alan Stewart, who joined from Marks & Spencer last week "could, in our view, bring some renewed confidence to forecasts".The stock was 2.5% higher at 284.95p by 15:27.BC