UK retailers have done well in 2021 as interest from private equity companies rose. Morrison’s was acquired by Clayton, Dublier & Rice in a £7 billion deal while Asda was acquired for £6.8 billion. And there is talk that Apollo Global is considering a bid for Sainsbury’s. So, let us look at the top 3 UK retail stocks to buy in December.
Tesco (LON: TSCO) is the biggest retailer in the UK valued at more than £21 billion. The company owns hundreds of stores, bank branches, and gas stations across the country. In 2021, the Tesco share price rose by more than 20% as investors cheered the company’s performance. It is currently trading at 286p, which is the highest it has been since 2014.
Tesco is a good investment for several reasons. First, as the biggest UK retailer, the company has handled the ongoing supply disruptions well. Second, the Covid-19 pandemic helped the firm to accelerate its e-commerce options.
Third, the company has a good track record of returning money to shareholders. Recently, the company decided to boost its dividend as the management attempted to boost the share price. Finally, Tesco Bank will benefit from higher interest rates.
Analysts expect that the Tesco share price will rise to 315p, which is substantially higher than the current level of 286p. Sone of the bullish analysts are from Citigroup, JP Morgan, and Berenberg.
Marks and Spencer
Marks and Spencer (LON: MKS) is a leading UK retailer valued at more than £4.45 billion. The stock jumped by more than 70% in 2021. This performance was mostly because of acquisition talk. After Morrisons was acquired, many analysts predicted that the company’s small size made it a good acquisition.
Still, there are other reasons why the Marks and Spencer share price has done well. The company has published strong results this year. Also, its partnership with Ocado (LON: OCDO) has made it a leading player in e-commerce in the country. I expect that the stock will keep rising in 2022.
JD Sports (LON: JD) is a sports and fashion company with hundreds of stores in the UK and other countries. The company is known for stocking brands from leading companies like Nike, Adidas, and Under Armour.
The JD Share price rose by more than 30% in 2021 as sports events resumed. This rising demand helped to push its revenue substantially higher. As a result, the company announced several acquisitions, including Marketing Investment Group, Finish Line, and Footasylum.
The company’s stock will do well in 2022 as the economy reopens and the demand for fashion and sporting goods rise. According to Marketbeat, analysts expect that the stock will rise to 973p, which is substantially higher than the current 207p.