BUZZ-UK supermarkets: top of FTSE 100 after bullish Goldman note
(Updates share prices, inserts Tesco (Frankfurt: 852647 - news) milestone, adds detail)
** Wm Morrison (+3.5%), Tesco (Swiss: TSCO.SW - news) (+3.1%) and Sainsbury (Amsterdam: SJ6.AS - news) (+2.1%) top three risers on the FTSE 100
** Goldman Sachs (NYSE: GS-PB - news) says margin pressure in the UK grocery market is easing
** "Competitive intensity is still high, but multiple datapoints suggest 2018 will see greater industry margin"
** Tesco hit 10-mth high after GS double upgrade, to "buy" from "sell", with broker expecting co to continue taking share -- supporting LFL growth -- while reinvesting cost savings at a lower level than in 1H18
** "This should drive greater margin expansion than we forecast before," GS says
** On the proposed Booker merger: GS estimates that FCF/share accretion could be in the range of -2 pct to +33 pct in 2021
** Booker (+1.7 pct) gets downgraded to "neutral" after reaching GS's target price
** GS also upgrades Morrison to "neutral" and increases its PT on Sainsbury (which remains a 'sell' with estimates well below the Street on wage catch-up pressures and non-food slowdown)
** Tesco the most actively traded UK bluechip stock on Tuesday