Tesco produced another strong annual result
Cutting cost has been the strategy
Price may touch 217
When it comes to Tesco, the strategy was simply cut the staff and increase the price in late 2017 in order to battle the Brexit storm. The company’s annual profit performance is impressive especially when you look at the challenges. Investors are impressed that the company has done better than the estimates when you look at its adjusted operating profit. The adjusted operating profit jumped by 28 percent for the year pushing the number to $2.33 billion. As an investor, you want to see the firm producing strong quarterly results and annual progress and Tesco is delivering on that.
The competition is still fierce as discounter outlets such as Aldi and Lidl are holding the strong position in the market and this remains the nightmare for Tesco. However, the new CEO who took the helm back in 2014, has simplified the product line and he is determined to cut the cost.
In terms of its stock performance, insiders have increased their holdings by 0.16 percent during the past six months. The blended forward P/E (5%) is still below the average of 18%