Dahlman Rose Cuts Price Target on Tesco (TESO), Forecasts 80% Earnings Growth for 2012

Dahlman Rose is reiterating its Buy rating on shares of Tesco (NASDAQ: TESO), but is lowering its price target from $20 to $18 following the release of its Q3 results.

The company released its Q3 earnings results well below expectations due to non operational items and lower than expected top driver margins. The firm notes that volumes were solid during the quarter and the company's backlog was flat.

For 2012, the firm forecasts earnings will grow 80 percent due to strong revenue growth, a 350 bps margin improvement in Tubular Services, and a 140 bps margin improvement in its Top Drives. For 2012 and 2013, Dahlman Rose is lowering its EPS estimates from $1.30 and $1.50 to $1.20 and $1.45.

For an analyst ratings summary and ratings history on Tesco click here. For more ratings news on Tesco click here.

Shares of Tesco closed at $13.36 yesterday.

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