LONDON (ShareCast) - Tesco (LSE: TSCO.L - news) has responded well to its latest trading update, though brokers were a little cautious.
Although
like-for-like sales growth in the UK heartland picked up, rising to 4.3% in the company's first quarter from 3.7% in the previous quarter, it still lags behind sector peers such as Wm Morrison and J Sainsbury.
Broker Charles Stanley expects this state of play to continue, as Tesco has been 'more aggressive than peers' in competing on price and this 'is having a deflationary impact on sales.'
Charles Stanley believes the group's long term earnings growth prospects remain the best in the sector, 'given significant growth potential in Retail Serices and International.
Long time BT (LSE: BT-A.L - news) sceptic Morgan Stanley (NYSE: MS - news) has joined the telco's fan club now that the worst seems to be over at the telecommunications giant's troubled Global Services division. The US bank has upgraded its rating of the shares from 'equal weight' to 'overweight' and lifted its price target from 130p to 140p on expectations of improved cash flow, driven by the company's cost cutting plans.
UBS (Virt-X: UBSN.VX - news) has raised its price target for support services giant Serco from 365p to 450p and upgraded its recommendation from 'neutral' to 'buy'.
FTSE 100 - Risers
BT Group (BT.A) 101.70p +7.17%
Lloyds Banking Group (LSE: LLOY.L - news) (LLOY) 70.00p +4.79%
Man Group (LSE: EMG.L - news) (EMG) 285.25p +3.92%
National Grid (LSE: NG.L - news) (NG.) 542.50p +2.94%
Tesco (TSCO) 364.50p +2.36%
Smiths Group (LSE: SMIN.L - news) (SMIN) 696.50p +2.35%
Serco Group (LSE: SRP.L - news) (SRP) 404.75p +2.27%
BAE Systems (LSE: BA.L - news) (BA.) 327.75p +2.10%
FTSE 100 - Fallers
Rio Tinto (LSE: RIO.L - news) (RIO) 2,817.00p -2.86%
Prudential (PRU) 411.00p -2.26%
Eurasian Natural Resources (ENRC) 669.00p -2.05%
BG Group (LSE: BG.L - news) (BG.) 1,079.00p -1.91%
Amec (LSE: AMEC.L - news) (AMEC) 670.50p -1.69%
Legal & General Group (LGEN) 60.70p -1.62%
Smith & Nephew (SN.) 454.75p -1.57%
Balfour Beatty (LSE: BBY.L - news) (BBY) 329.25p -1.50%
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