Tesco is one of the world’s largest retailers, the group operates stores in the United Kingdom, Ireland, in eastern Europe, in Turkey, Japan, China, South Korea and the United States.

Last earnings release showed full year sales up 5.7% to £64.5bn, with diluted earnings per share to 35p up 6% against year previous. These numbers was conformed to management’s guidance. The sales in UK grew 5.5%, the largest company’s market, and 10% in Asia. The growth continues in US, even if weaker than estimates and where the company has a small share of market. The share is trading 9 times earnings estimate for next financial year, according to Thomson Reuters’ consensus, and it is cheaper than average sector, according 4-traders peers.

The share was penalized in January with sharp fell more than 16% in one trading session, after sales results, which has shown weaker numbers related Christmas period’s sales. For this date the stock is trading in neutral trading range between 340 / 310 GBp. At today the share is on the lower band of this range, and could take benefit from technical supports. We suggest to take a long position at current price in order to aim a first target to 340 GBp. In add we forecast on mid-term a return in the area of 400 GBp, seen this value doesn’t reflect the group’s good financial health. We suggest a stop loss at 308 GBp