SHARE OF THE WEEK: Tesco shareholders hoping for positive update

Tesco’s shareholders are hoping for a positive update next week, as its share plunged around 30 percent this year.

Like its rivals, the supermarket giant is plagued by the rising cost of doing business and declining demand from shoppers desperate for bargains.

With Aldi and Lidl on the rise, the Big Four of Tesco, Sainsbury’s, Asda and Morrisons are hesitant to raise prices, which could lead to shoppers flocking to discounters in even greater numbers.

Morrisons has been passed over by Aldi, which is now Britain’s fourth largest supermarket. According to Kantar, Tesco remains dominant, with a market share of 26.9 percent.

But with stocks falling, management is under pressure to deliver reassuring half-year results on Wednesday, though Goldman Sachs analysts believe the stock’s bleak market outlook is “over the top.”

Tesco thus hopes to meet expectations for a half-year turnover of £31.2 billion, up from £30.4 billion a year earlier.

First half profit last year was £1.5bn. The city also wants to know if Tesco remains on track with regard to its cash flow targets, as it aims for annual revenue of between £1.4bn and £1.8bn.

Rewards for investors should be nailed. So far, Tesco has returned £300m to shareholders through the current buyback program, with a further £750m to be returned by April 2023.

Analysts expect the proposed dividend for the full year to be 10.9 pence per share, meaning the first half payment will be flat at 3.2 pence.