Should I buy Tesco shares as takeover talk heats up?
Takeover action over at Morrisons has boosted investor appetite for some of the FTSE 100s other grocery giants too. The Tesco (LSE: TSCO) share price, for example, has just hit three-month highs above 236p per share on talk it could also become a target. Its possible that Britains biggest retailer could continue to soar as the bidding war intensifies too. Despite these recent gains though, the Tesco share price still looks mighty cheap on paper. City analysts think the UK retail share will enjoy a 145% rise in annual earnings during the 12 months to February 2022. A subsequent forward price-to-earnings growth (PEG) ratio of 0.1 sits well inside the widely-regarded bargain benchmark of 1. 5G is here  and shares of this sleeping giant could be a great way for you to potentially profit! According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air And if you click here well show you something that could be key to unlocking 5Gs full potential...  At current prices, Tesco also carries a gigantic dividend yield a shade below 4.5%. This smashes the broader forward average for UK shares by a full percentage point. Looking on the bright side  Its certainly possible the Tesco share price could continue rising strongly. Factors driving it could include:  #1: Investment in e-commerce keeps going. 2020s public health emergency prompted all the UKs major supermarkets to significantly improve their online propositions. Tesco solidified its position at the top of the tree last year by taking on 16,000 new workers to turbocharge its online capacity. And the company plans to keep spending to capitalise fully on the huge growth that online grocery looks set to experience. Its plans include opening 25 new fulfilment centres over the next three years. #2: A Tesco takeover emerges. As I said, speculation that Tesco could also become a takeover target has helped lift the firms share price. Now its true that the companys market-cap is almost three times that of Morrisons, at 17.9bn. But that doesnt rule out the possibility of a buyer swooping in. Amazon, for example, has more than enough financial clout to buy up Britains biggest supermarket. Whats more, the company has a track record of making big statements as it aggressively builds its position in the grocery industry. Dont forget Amazons takeover of Whole Foods several years back. Dangers to Tescos share price  All that said, Ive some reservations about buying Tesco shares today. These centre around the worsening competitive pressures it faces as Amazon  along with budget outlets such as Aldi and Lidl, and premium chains such as Waitrose  all vie for the retailers customers. At one time, 1 out of every 6 found its way into Tescos tills. But the ambitious store expansion programmes of its rivals has shaved a big lump off the FTSE 100 firms market share. Not only are these schemes set to continue, but it seems like the fight online is about to get a hell of a lot bloodier too. The dangers to Tescos crumbling customer base look set to keep growing, as does the pressure on its wafer-thin margins as discounting across the industry ramps up.