Barclays reinstates Tesco at 'overweight' on expected outperformance in 2021

Analysts at Barclays reinstated their 'overweight' recommendation for shares of Tesco on Monday, pointing to the shares' underperformance across 2020 and multiple tailwinds.

During the preceding year, the shares had delivered a total shareholder return of -7.0%, against -6.7% for rival Morrison and 1.1% over at Sainsbury.

That was despite the grocer's exit from Asia and accompanying £5bn cash return, as well as the end of the sizeable drag on its free cash flow from pension top-up payments, they highlighted.

Furthermore, food retail was "far from the worst hit" by the pandemic, they added.

Barclays placed a 290.0p target on the firm's shares.