Monday saw Tesco open on an upward gap as new plans for the retailer gain confidence on the UK100 [FTSE].
Since the 8 December crash for Tesco PLC, which saw share price plummet to 155.33 to bring in total share loss for the year at 44%, the UK retailer has seen constant rises to 223.45.
Monday’s rises saw Tesco go to the top of the UK100 [FTSE] on the back of Morgan Stanley’s regrade that showed Tesco to be one of its six strongest “best ideas” for investment, taking the stock from “equalweight” to “overweight”.
UK inflation fell for last week to its lowest figure in almost 15 years, and consumer price index showed 0.5% in November, giving retailers a hard environment to work in. However, Tesco’s plan to revive announced by CEO Dave Lewis, aims to save £250 million a year and will see 43 unprofitable stores close across the UK, plus moving the Cheshunt headquarters to the Welwyn Garden City office. Overheads will be cut by 30%, which will include an undisclosed amount of job cuts. Capital expenditure will be reduced to £1 billion. A new UK business leader is appointed, Matt Davies, former chief executive of Halfords, and Dunnhumby, the data analysis group that runs its Clubcard loyalty scheme, will be sold off alongside Blinkbox, which will be sold to telecoms group TalkTalk. The decision was also made not to pay a final dividend for 2014/15.
On the back of the revival plan, Tesco shares saw such a fall that Morgan Stanley gave the upgrade.
MT4 chart: TESCO
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