BofA flags two top picks amid resilient UK food retail outlook
Yahoo Finance ·
BofA flags two top picks amid resilient UK food retail outlook Navamya Acharya Mon, September 28, 2026 at 10:06 AM EDT 2 min read TSCO.L BAC MKS.L Investing.com --Tesco and Marks & Spencer are BofA Securities' two "buy"-rated stocks in its latest Pan European Food Retailing report, with the broker citing resilient grocery demand, strong execution and further growth opportunities. Still guessing which names to buy? Our AI rebuilds its stock picks at the start of every month. The list is beating the market by 120%. See what's on it » BofA retains price objectives of 540p for Tesco and 440p for M&S, while noting different sources of upside for the two retailers. BofA expects Tesco to deliver a solid first-half performance, with operational trends broadly consistent with management expectations. The UK grocery environment improved through the second quarter as food inflation moderated and grocery volumes recovered. BofA forecasts group revenue growth of 2.6% in Q2, with UK sales up 2.6%. Recent market-share data has been less supportive, with Tesco moving from gains earlier in the year to modest losses since May. Should you buy NVIDIA right now? Before you decide, consider this: an AI-powered list of stock picks is outperforming the market by 120%, and it updates at the start of every month. See this month's picks » BofA, however, attributes this largely to difficult comparisons following Tesco's benefit from the disruption at M&S and Co-op last year. It says Tesco continues to benefit from its scale, Clubcard proposition and broad price positioning. For H1, BofA forecasts adjusted operating profit of £1.73 billion, up 1.5% year on year, although this implies a 10bp margin contraction. The broker expects Tesco to continue investing in price, service and digital capabilities while absorbing wage and operating-cost pressures. It has raised FY27-FY29 EPS estimates by around 1%, while leaving its 540p price objective unchanged. At M&S, BofA identifies Food as the main source of upside, supported by market-share gains, new space growth and improving online economics through Ocado Retail. It expects H1 revenue to rise 13% to £8.98 billion, with adjusted PBT of £396m, up from £184m in the previous-year period. The broker has upgraded its Food sales forecasts to £19.1bn for FY27 and £20.0bn for FY28, increases of 3% and 4.3%, respectively. BofA says M&S Food continues to benefit from new space, improving like-for-like sales and exposure to convenience and online. The main area of caution is Fashion, Home & Beauty. BofA says the next phase of the turnaround will be more demanding, requiring improvements in product, online penetration and store optimisation. It nevertheless maintains its "buy" rating and 440p price objective, with Food remaining the primary driver of its valuation upside. Looking for the next multi-bagger? This AI enabler is up 90%+ since picked by our AI models in July -- and still has a 62% upside » BofA flags two top picks amid resilient UK food retail outlook U.S. stocks open the week with losses amid Iran tensions, OpenAI training halt Deutsche Bank lifts Royal Caribbean to Buy, sees attractive entry point
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