Joao Pedro is set to stay at Watford for the upcoming season, the Watford Observer understands.

The Brazilian's future has been the subject of speculation after the Hornets were relegated from the Premier League, but sources say they are not expecting him to depart this summer.

A report in The Athletic on Monday morning stated that owner Gino Pozzo is keen for the player to continue his development with the club, so that he can reach a satisfactory market value.

Those reports have since been supported, while The Watford Observer has also been told that there is an expectation the striker can better his nine goal haul that he achieved in his first full season with the Hornets in the second tier.

Should he manage to do that, the 20-year-old would not only provide a big helping hand for Watford in their hopes an immediate return to the top flight, he would also improve his chances of getting a big money move at a later date.

There is no rush for the Hornets to sell Joao Pedro just yet, with his contract running until 2027.

However, if they are to see a substantial return from their £9million investment, he would need to maintain his upward trajectory over the next few seasons.

Last season's three-goal haul in the Premier League was seen as underwhelming, but there is still a belief at the club that he will reach a very high standard in the coming years.