Tesco downgraded to Neutral from Overweight at JPMorgan

JPMorgan downgraded Tesco to Neutral from Overweight with a price target of 250 GBp, down from 270 GBp. The analyst is taking a cautious stance on the European food retail sector, reflecting the firm’s analysis of grocery pricing deflation prospects approaching 2024. The firm thinks current sentiment and valuations make for an unattractive risk/reward as investors start to reassess portfolios into 2024. Deflation is a real possibility, and its implications not factored into either expectations or share prices, the analyst tells investors in a research note. JPMorgan downgraded four stocks it sees as being the most exposed. Colruyt is now its sole Overweight in the sector.