Tesco’s tie-up with wholesaler Booker has won over big broker JP Morgan, which has become a buyer of the grocer’s stock for the first time in five years.

The broker described Tesco as a “visible turnaround story” and saw opportunities to come.

Tesco’s £3.7bn merger with Booker – which owns retail fascias such as Budgens – was completed earler this month. It is designed to enable to the enlarged business to take a greater share of the overall food market, including supplying restaurants as well as shops.

Booker chief executive Charles Wilson is taking over as chief executive of Tesco’s retail and wholesale businesses in the core UK and Ireland markets.

In a note to investors JP Morgan said: “We turn buyers of Tesco shares for the first time in five years as its cash flow, top line and balance sheet have improved, while Booker adds new addressable market potential and strong execution capabilities with Charles Wilson now at the helm.”

The broker said: “We believe a stronger Tesco does not benefit Sainsbury given their geographic and customer overlap. We see Tesco’s strategy (seeking growth within wholesale, focusing on food, online and convenience) as more defensive than that of Sainsbury (focus on non-food).”