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FTSE 100 at the close: Tesco, Endeavour Mining

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By Patrick Munnelly, Market Strategist, Tickmill

On Friday, the UK’s FTSE 100 index made early gains, setting the stage for its first weekly increase in the past four weeks.

Investors were in a state of anticipation, seeking signals that could provide insights into the future direction of U.S. interest rates, Federal Reserve Chair Powell dampened the mood as more rate rises remained on the table. Global risk sentiment soured as did the FTSE facing another day of losses.

FTSE 100 biggest movers

On the positive side of the ledger Barclays has revised its projected share price for Tesco [LON:TSCO] upwards as the company approaches the release of its first-half results next month.

The bank has increased its target price, citing its anticipation of robust performance from Tesco’s upcoming financial report on October 4th. In a research report released on Friday, Barclays expressed confidence in strong outcomes for Tesco. The bank’s forecast predicts that the UK like-for-like growth will remain relatively steady at 8.8%, in comparison to the 9% growth recorded in the initial quarter. Additionally, Barclays expects a 10.2% increase in retail earnings before interest (EBIT).

Barclays also speculated that Tesco might consider revising its full-year retail EBIT and free cash flow guidance, potentially even with a cautious outlook on the latter half of the year. This aligns with Tesco’s previous statement in June, where the company projected its full-year EBIT to remain mostly unchanged year-on-year, and retail free cash flow to fall within the range of £1.4 billion to £1.8 billion.

Despite maintaining a ‘neutral’ stance on the broader consumer sector, Barclays continues to hold an ‘overweight’ position on Tesco. Tesco shares were up 1.9% at the close.

Miners continue to weigh on the export heavy FTSE as China growth appears to be diminishing and the reopening story fades Endeavour Mining [LON:EDV] sit bottom of the index down 2.8% followed closely by Fressnilo [LON:FRES] -2%.

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This article does not constitute investment advice. Do your own research or consult a professional advisor.

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