FTSE 100 broker round-up: Tesco, Bunzl and Admiral
The supermarket giant has delivered for shareholders in recent years but is it now fairly valued? Graeme Evans takes a look at some of today’s City recommendations.
12th August 2026 12:50
by Graeme Evans from interactive investor
Shoppers inside a Tesco supermarket in London. Photo: Peter Dazeley via Getty Images.
The strong summer for Tesco (LSE:TSCO) shares showed more signs of fizzling out today after a leading City bank removed the Buy recommendation it has held for more than three years.
Shore Capital also lowered its price target from 525p to 480p, which compares with the 501p that Tesco hit on 29 July following a run from 430p at the start of June and 415p in January.
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The shares today retreated another 123p to 449.5p to stand near the bottom of the FTSE 100 index, meaning they have lost about 10% of their value in the space of a fortnight.
Other retail stocks also came under pressure today as Marks & Spencer Group (LSE:MKS) reversed 9.2p to 392.6p, Next (LSE:NXT) eased 220p to 15,365p and Sainsbury (J) (LSE:SBRY) weakened 4.5p to 340p.
Shore, which switched to a Buy stance in March 2023 when shares were 256p, said that Tesco has done “all that we could have asked” from the business in recent years.
It added: “An outstanding management team has executed retail delivery with excellent consistency and strong capital discipline has driven sustained cash generation, making for attractive total shareholder returns.”
Shore continues to see merits in the investment thesis, but on a forecast multiple of 14.9 times earnings and with the dividend yielding 3.4% it regards the stock as fairly valued.
The bank left its earnings expectations unchanged but is now at Hold as it feels it is sensible to pause for breath after the rating expansion of recent times and ahead of taking a closer look at what 2027-2030 may bring.
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In the short term, it sees a trickier UK grocery retail scene as summer 2026 volumes are quite shallow, cost recovery not as easy and the competitive intensity a little higher.
It added: “The successive progress of Tesco, with very little new footage in tow, is a great achievement but that comparative mountain has, perhaps, become a potentially greater headwind for the firm.”
Bunzl (LSE:BNZL) shares also came under pressure in today’s session after Deutsche Bank responded to this year’s 34% price rebound by switching its recommendation from Buy to Hold.
The stock lost 40p at 2,766p, which compares with the bank’s new 3,000p target on the workplace supplier of essential not-for-sale products and services.
In 2025, the business experienced weak volumes, deflation and self-inflicted execution problems in its North America Distribution business.
Deutsche Bank said management’s tone has noticeably improved over the past 18 months amid positive volume growth, a return to inflation and restored service and product availability in its North America distribution business.
Half-year results are due on 1 September and should confirm better operational delivery, positive volume trends and a more supportive pricing backdrop.
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With the shares having largely recovered the ground lost after the 2025 profit warning, and now trading closer to its long-run average valuation multiples, the bank believes the current positives are more fairly reflected in the price.
On the FTSE 100 risers board, Admiral Group (LSE:ADM) added another 80p to 3,800p after UBS sweetened its Buy stance with a new price target of 4,300p.
The upgrade follows last week’s interim results, which showed a stronger-than-expected underwriting margin as Admiral increased its Motor pricing by high single digits compared with the industry’s low single digits.
UBS said: “Given the strong historical correlation between Admiral’s valuation and UK Motor pricing conditions, we believe the shares remain attractively valued.
“Having priced ahead of the market, Admiral is now positioned to benefit as competitors catch up, supporting both earnings upgrades and a re-rating.”
Admiral trades on 14.2 times the bank’s forecast 2027 earnings and 13 times on a two-year forward blended basis, below its historic average of 16 times.
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