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Tesco plc
(LSE:TSCO)
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Rating:71Outperform
Price Target:
526.00 p
▲(13.19% Upside)
Action:Reiterated
Date:10/08/26
The score is driven primarily by above-average financial performance (improving earnings and cash generation) and a strong, guidance-supported earnings call with evidence of market-share gains and ongoing efficiency delivery. The main offsets are leverage and thin industry margins, while technicals and valuation are broadly neutral-to-supportive rather than standout.
Positive Factors
Revenue and Profit Growth
Tesco has delivered sustained revenue growth alongside a substantial improvement in net income and net margin. This combination indicates stronger earnings power and resilient demand across its grocery and wider retail offer, supporting reinvestment and continued business development over the next several quarters.
Negative Factors
Structurally Thin Margins
Tesco’s low-margin model leaves limited room to absorb higher operating costs, inflation or more aggressive pricing without affecting profitability. Even with recent improvement, relatively small changes in costs or promotional intensity can materially influence earnings and reduce operating flexibility.
Read all positive and negative factors
Positive Factors
Negative Factors
Revenue and Profit Growth
Tesco has delivered sustained revenue growth alongside a substantial improvement in net income and net margin. This combination indicates stronger earnings power and resilient demand across its grocery and wider retail offer, supporting reinvestment and continued business development over the next several quarters.
Read all positive factors
Tesco plc (TSCO) vs. iShares MSCI United Kingdom ETF (EWC)
Market Cap
£33.46B
Dividend Yield2.73%
Average Volume (3M)14.50M
Price to Earnings (P/E)18.0
Beta (1Y)0.68
Revenue Growth5.41%
EPS Growth30.44%
CountryUK
Employees340,000
SectorConsumer Defensive
Sector Strength42
IndustryGrocery Stores
Share Statistics
EPS (TTM)0.30
Shares Outstanding6,232,687,000
10 Day Avg. Volume11,312,037
30 Day Avg. Volume14,496,767
Financial Highlights & Ratios
PEG Ratio1.02
Price to Book (P/B)2.73
Price to Sales (P/S)0.42
P/FCF Ratio11.17
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
£523.33Price Target Upside12.62% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering10
EPS Forecast (FY)0.32
Revenue Forecast (FY)£74.91B
Tesco plc Business Overview & Revenue Model
Company Description
Tesco PLC, encompassing its various subsidiaries, is a major player in both consumer retail and banking sectors. The company delivers a wide assortment of food items to customers via a vast network of approximately 4,752 physical stores situated i...
How the Company Makes Money
Tesco makes money primarily by selling products to consumers through its retail network and online channels. Its main revenue stream is retail sales of groceries (fresh, ambient, and frozen foods) and everyday essentials, generated from high-frequ...
Tesco plc Earnings Call Summary
Earnings Call Date:Oct 08, 2026
(Q2-2027)
| % Change Since: |
Next Earnings Date:Apr 14, 2027
Earnings Call Sentiment Positive
The call was strongly positive, supported by record customer satisfaction, broad-based profit, EPS and cash growth, market-share gains, rapid-delivery momentum, ongoing cost savings, and increased investment and shareholder returns. The main cautions were moderated U.K. like-for-like growth, declining convenience sales driven by tobacco, a higher promotional rate, intense competition, and uncertainty around the second half, inflation, AI, and rapid-delivery capacity.Positive Updates
Record Customer Satisfaction
Tesco achieved its highest ever customer satisfaction score, with meaningful gains across every measure, including ease, quality, value, and reward. The company cited a record NPS of 33.
Negative Updates
Convenience Like-for-Like Decline
Total convenience like-for-like sales, including One Stop stores, declined 1.7%, largely reflecting the continued decline in the tobacco market. Tesco Express sales were broadly flat year-on-year.
Read all updates
Q2-2027 Updates
Positive
Negative
Record Customer Satisfaction
Tesco achieved its highest ever customer satisfaction score, with meaningful gains across every measure, including ease, quality, value, and reward. The company cited a record NPS of 33.
Read all positive updates
Company Guidance
The company expects group adjusted operating profits of between GBP 3.15 billion and GBP 3.3 billion for the full year, narrowing to the upper half of our previous range; free cash flow is expected to be within the medium-term guidance range of GBP 1.5 billion-GBP 2 billion; capital expenditure is expected to be around GBP 1.7 billion this year, up from our previous guidance of around GBP 1.6 billion and around GBP 200 million higher than last year; Save to Invest is on track to deliver its GBP 500 million target for the full year; Whoosh is on track to deliver sales in excess of half a billion pounds this year; Finest full-year sales are expected to be well over GBP 3 billion; and the framework remains modest top-line growth, 5%+ operating profit growth, and double-digit EPS growth.Tesco plc Financial Statement Overview
Summary
Income Statement
72
Positive
Balance Sheet
63
Positive
Cash Flow
74
Positive
| Breakdown | TTM | Feb 2026 | Feb 2025 | Feb 2024 | Feb 2023 | Feb 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 75.03B | 73.71B | 69.92B | 68.19B | 65.76B | 61.34B |
| Gross Profit | 5.67B | 5.55B | 5.36B | 4.85B | 4.68B | 4.69B |
| EBITDA | 5.18B | 5.01B | 4.78B | 4.83B | 3.22B | 4.39B |
| Net Income | 1.90B | 1.79B | 1.63B | 1.19B | 737.00M | 1.48B |
Balance Sheet | ||||||
| Total Assets | 40.33B | 39.47B | 38.89B | 47.04B | 46.13B | 49.35B |
| Cash, Cash Equivalents and Short-Term Investments | 4.44B | 4.16B | 4.63B | 4.67B | 4.45B | 4.65B |
| Total Debt | 14.77B | 15.08B | 14.67B | 14.84B | 15.08B | 15.36B |
| Total Liabilities | 28.74B | 28.02B | 27.23B | 35.37B | 33.90B | 33.71B |
| Stockholders Equity | 11.60B | 11.46B | 11.67B | 11.67B | 12.24B | 15.66B |
Cash Flow | ||||||
| Free Cash Flow | 3.15B | 2.80B | 1.68B | 2.45B | 2.56B | 2.61B |
| Operating Cash Flow | 4.56B | 4.14B | 2.92B | 3.84B | 3.81B | 3.79B |
| Investing Cash Flow | -1.20B | -943.00M | -441.00M | -1.70B | -790.00M | -1.77B |
| Financing Cash Flow | -3.13B | -3.09B | -2.94B | -1.86B | -3.19B | -2.23B |
Tesco plc Technical Analysis
Positive
464.70
Price Trends
487.45
Positive
475.41
Positive
464.30
Positive
Market Momentum
15.86
Positive
70.24
Negative
32.26
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:TSCO, the sentiment is Positive. The current price of 464.7 is below the 20-day moving average (MA) of 518.82, below the 50-day MA of 487.45, and above the 200-day MA of 464.30, indicating a bullish trend. The MACD of 15.86 indicates Positive momentum. The RSI at 70.24 is Negative, neither overbought nor oversold. The STOCH value of 32.26 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GB:TSCO.
Tesco plc Risk Analysis
Tesco plc disclosed 15 risk factors in its most recent earnings report. Tesco plc reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Tesco plc Peers Comparison
UnderperformOutperform
Sector (62)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | £33.46B | 18.00 | 16.45% | 2.73% | 5.41% | 30.44% | |
71 Outperform | £2.34B | 17.84 | 20.97% | 3.00% | 6.89% | -9.02% | |
63 Neutral | £13.44B | 14.35 | 8.44% | 3.28% | -2.16% | -24.87% | |
63 Neutral | £2.77B | 16.92 | 21.74% | 3.49% | 3.66% | -48.66% | |
62 Neutral | $20.33B | 14.63 | -3.31% | 3.23% | 1.93% | -12.26% | |
62 Neutral | £7.52B | 20.86 | 6.39% | 5.14% | -2.65% | 7.32% | |
57 Neutral | £2.70B | -10.76 | -15.94% | ― | ― | ― |
* Consumer Defensive Sector Average
GB:TSCO
Tesco plc
540.00
99.79
22.67%
GB:OCDO
Ocado Group
322.20
112.80
53.87%
GB:ABF
Associated British Foods
1,922.50
-287.54
-13.01%
GB:BME
B&M European Value Retail SA
275.40
112.65
69.22%
GB:GRG
Greggs plc
2,302.00
779.40
51.19%
GB:SBRY
J Sainsbury plc
345.40
34.78
11.20%
Tesco plc Corporate Events
Business Operations and StrategyExecutive/Board Changes
Tesco strengthens board with appointment of seasoned non-executive Wendy Becker
Positive
Oct 8, 2026
Tesco plc has appointed Wendy Becker as a non-executive director, effective 1 November 2026, adding her to its Remuneration Committee and Nominations and Governance Committee. The move brings extensive board-level and executive experience from glo...
Business Operations and StrategyStock BuybackDividendsFinancial Disclosures
Tesco lifts profit, cash flow and buybacks as record customer satisfaction boosts growth
Positive
Oct 8, 2026
Tesco reported a solid first half for 2026/27, with sales excluding VAT and fuel up 1.6% at constant rates to £33.8bn and adjusted operating profit up 6.3% to £1.78bn, supported by improved sales mix, cost savings and newer income stream...
Business Operations and StrategyRegulatory Filings and Compliance
Tesco Executives Acquire Shares Under Routine Incentive Plan
Positive
Sep 28, 2026
Tesco PLC disclosed that trustees of its Share Incentive Plan purchased small quantities of ordinary shares on 25 September 2026 on behalf of several senior executives, including Group Chief Executive Ken Murphy and Chief Technology Officer Guus D...
Executive/Board ChangesRegulatory Filings and Compliance
Tesco executives acquire shares through incentive plan
Positive
Sep 1, 2026
Tesco has disclosed that trustees of its Share Incentive Plan purchased small amounts of ordinary shares on 28 August for several senior executives, including chief executive Ken Murphy and other top managers, at a price of about £4.56 per sh...
Regulatory Filings and Compliance
Tesco CEO Ken Murphy Exercises Options and Retains Shares Under Savings Scheme
Neutral
Aug 20, 2026
Tesco PLC has disclosed that Group Chief Executive Officer Ken Murphy exercised options over 9,890 ordinary shares under the company’s Savings-Related Share Option Scheme at a price of 182 pence per share. Following the option exercise, Murp...
Regulatory Filings and Compliance
Tesco Chair Gerry Murphy Buys £44,845 in Company Shares
Positive
Aug 18, 2026
Tesco PLC disclosed that its chair, Gerry Murphy, has purchased 10,000 ordinary shares in the company on 17 August 2026 at a price of £4.4845 per share on the London Stock Exchange main market. The transaction, worth £44,845, was reporte...
Regulatory Filings and Compliance
Tesco discloses £1.53m share sale by senior executive
Neutral
Aug 6, 2026
Tesco PLC has disclosed that Christine Heffernan, its Chief Communications and Sustainability Officer, sold 317,000 ordinary shares in the company on 5 August 2026 at a price of £4.817 per share. The transaction, executed on the London Stock ...
Executive/Board ChangesRegulatory Filings and Compliance
Tesco executives receive shares under routine incentive plan
Neutral
Aug 4, 2026
Tesco has disclosed a routine purchase of ordinary shares for several senior executives under its Share Incentive Plan’s Partnership Share Scheme. On 31 July 2026, the plan’s trustees bought small amounts of Tesco stock on the London S...
Regulatory Filings and Compliance
Tesco Confirms Share Capital and Voting Rights for Transparency Reporting
Neutral
Aug 3, 2026
Tesco has confirmed that, as of 31 July 2026, its issued share capital comprises 6,265,124,955 ordinary shares, each carrying one vote at general meetings, with no shares held in treasury. The company emphasised that this share count should be use...
Business Operations and StrategyStock BuybackRegulatory Filings and Compliance
Tesco Advances £750m Buyback with New Share Purchase
Positive
Aug 3, 2026
Tesco plc has continued its £750 million share buyback programme, purchasing 605,430 ordinary shares on 31 July 2026 at an average price of 489.14p, with Banco Santander acting as broker. Following this latest transaction, Tesco’s share...
Business Operations and StrategyStock Buyback
Tesco Advances £750m Share Buyback, Cancels Over 119m Shares
Positive
Jul 31, 2026
Tesco PLC has continued its £750 million share buyback programme, purchasing 750,000 ordinary shares on 30 July 2026 at an average price of 496.20 pence, with Banco Santander acting as broker. These shares are being cancelled, leaving 6,265,7...
Business Operations and StrategyStock Buyback
Tesco Advances £750m Share Buyback, Cutting Share Count Further
Positive
Jul 30, 2026
Tesco plc has continued executing its £750 million share buyback programme, purchasing 500,000 ordinary shares on 29 July 2026 at an average price of 491.44 pence, with Banco Santander acting as broker. This latest transaction forms part of a...
Business Operations and StrategyStock Buyback
Tesco Advances £750m Buyback, Cuts Share Count Further
Positive
Jul 29, 2026
Tesco plc has continued executing its £750 million share buyback programme, purchasing 1,000,000 ordinary shares on 28 July 2026 at an average price of 491.22 pence per share through Banco Santander. This latest transaction forms part of a br...
Business Operations and StrategyStock BuybackRegulatory Filings and Compliance
Tesco Advances £750m Buyback, Cuts Share Count by Over 117m
Positive
Jul 28, 2026
Tesco plc has continued executing its £750 million share buyback programme, repurchasing 557,656 ordinary shares on 27 July 2026 at an average price of 481.70p, with the shares to be cancelled. This latest transaction leaves 6,267,980,385 ord...
Regulatory Filings and Compliance
Tesco Executives Disclose Sales of Ordinary Shares
Neutral
Jul 10, 2026
Tesco PLC has disclosed that two senior executives, Geoff Byrne, CEO for Ireland and Northern Ireland, and Andrew Yaxley, CEO of Booker, have sold portions of their holdings in the company. Byrne disposed of 60,000 ordinary shares at £4.702 p...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.