The Tesco share price: is it the biggest investment trap on the FTSE 100?
Fool.co.uk22 June 2019, 09:15 UTC. As someone who has covered Tesco (LSE: TSCO) for many a year now, I’m afraid its appeal with share investor remains something which escapes me. Not only is Britain’s biggest supermarket predicted to record double-digit earnings increases through the next fiscal years, but at current prices it can also be considered quite a bargain in respect of its anticipated growth trajectory, as illustrated by a forward P/E ratio of 13.8 times. I don’t think I’m that hard to please but, while the rest of the market has been piling into Tesco since the start of 2019 (its share price is up around 25% year to date as a result), I remain concerned by its lack of serious sales growth. Well critics of British American Tobacco, for instance, may suggest not, given the massive decline in global cigarette demand, while Lloyds or RBS might be hugely disliked because of the murky outlook for the British economy. What I would say, though, is those huge share price gains at Tesco in 2019 leave it in danger of a sharp correction should — as I expect — sales growth remains under pressure. For this reason, I’m avoiding it at all costs.