The investment prospects for Tesco PLC (LON:TSCO) (TSCO.L), BAE Systems plc (LON:BA) (BA.L), Vodafone Group plc (LON:VOD) (VOD.L) and Taylor Wimpey plc (LON:TW) (TW.L) could be brighter than the stock market is expecting in my opinion.
Although Tesco faces weak consumer confidence at the moment, the company is still expected to post double-digit EPS growth over the next two years.
Its strategy seems to be working well, with it becoming more efficient and improving its customer service levels. The supply deal with Carrefour could provide a competitive advantage versus peers, while the acquisition of Booker may further strengthen Tesco’s position in the wider food services industry.
BAE’s share price has come under pressure in recent months, with uncertainty surrounding Saudi Arabia seeming to weigh on investors’ minds. This could continue in the near term in my view, with concerns about global growth also potentially having an impact on the wider sector.
However, with defence budgets across the globe set to increase over the medium term, I think that BAE could be in a strong position to generate improving financial performance. This could be a catalyst on its share price in the long run, while what appears to be a sound balance sheet could provide a firm foundation for growth.
Vodafone’s share price fall in recent months has been relatively disappointing. Investors appear to be unsure about the company’s financial prospects following its acquisition of Liberty Global’s cable network.
In my view, the company could deliver improving financial performance as a result of its partnerships and acquisitions, while a 7%+ dividend yield may indicate that it offers good value for money. As a result, I believe that the Vodafone share price could outperform the FTSE 100 in the long run, although it may be volatile in the near term.
Taylor Wimpey may also experience a period of further uncertainty in the coming months. Brexit seems to be causing confidence in the UK housing market to come under pressure, and this could lead to uncertainty in the minds of investors.
However, with the company forecast to post EPS growth in the next two years and it having a dividend yield of over 9%, I think the Taylor Wimpey share price could perform well in the long run. Housing demand remains high, and this could drive its financial performance upwards.