The UK-based supermarket fell 4% overnight following their 1H result which was strong in terms of sales growth while slightly weaker in terms of margins as they go head to head with Aldi & Lidl for market share. Tesco now expects full-year retail adjusted EBIT of £2.4b to £2.5b, compared with a previously-guided range of £2.4b to £2.6b, not a big reduction and the 1H results do show resilience, but tough conditions mean the outlook is more cautiously nuanced in the 2H. Overall, we had Tesco earmarked as a funding vehicle for other purchases and the overnight result does nothing to change that view.
MM is likely to sell TSCO LN in the International Equities Portfolio
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