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Tesco (TSCDY)
OTHER OTC:TSCDY
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Tesco
(OTC:TSCDY)
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Select Model
Rating:74Outperform
Price Target:
$20.00
▲(12.23% Upside)
Tesco's overall stock score is driven by strong financial performance and positive technical indicators. The earnings call provided a boost with its positive outlook, despite some challenges. Valuation concerns slightly dampen the score, but the company's strategic initiatives and market position remain strong.
Tesco (TSCDY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$38.52B
Dividend Yield3.02%
Average Volume (3M)10.90K
Price to Earnings (P/E)20.0
Beta (1Y)0.05
Revenue Growth4.52%
EPS Growth-17.11%
CountryUS
Employees340,000
SectorConsumer Defensive
Sector Strength42
IndustryGrocery Stores
Share Statistics
EPS (TTM)0.62
Shares Outstanding2,168,476,000
10 Day Avg. Volume24,759
30 Day Avg. Volume10,904
Financial Highlights & Ratios
PEG Ratio-3.97
Price to Book (P/B)2.21
Price to Sales (P/S)0.37
P/FCF Ratio15.40
Enterprise Value/Market Cap1.36
Enterprise Value/Revenue0.75
Enterprise Value/Gross Profit10.40
Enterprise Value/Ebitda11.02
Forecast
1Y Price Target
$20.00Price Target Upside12.23% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
Tesco Business Overview & Revenue Model
Company DescriptionTesco PLC, together with its subsidiaries, engages in retailing and retail banking activities. It provides food products through approximately 4,752 stores in the United Kingdom, Republic of Ireland, the Czech Republic, Slovakia, and Hungary, as well as through online. The company is also involved in the food and drink wholesaling activities. In addition, it offers banking and insurance services in the United Kingdom. Further, the company operates a network of one stop convenience stores; and provides data science, technology, software, and consultancy services. Tesco PLC was founded in 1919 and is headquartered in Welwyn Garden City, the United Kingdom.
How the Company Makes MoneyTesco generates revenue primarily through its retail operations, which include supermarkets, hypermarkets, and convenience stores. The company's core revenue stream comes from the sale of food and non-food products in its stores and online platforms. In addition to retail sales, Tesco earns money through its banking and financial services, including personal loans, credit cards, and insurance products. The company also benefits from various partnerships, such as its Clubcard loyalty program, which drives customer retention and increases sales. Other revenue sources include property management and the sale of data analytics services to suppliers, leveraging insights from customer purchasing behavior to enhance marketing strategies.
Tesco Key Performance Indicators (KPIs)
Any
Adjusted Operating Profit by Segment
Reveals profitability across different business areas, highlighting which segments drive earnings and where operational improvements or challenges exist.
Reveals profitability across different business areas, highlighting which segments drive earnings and where operational improvements or challenges exist.
Data provided by:
Main Street Data
Main Street DataTesco Earnings Call Summary
Earnings Call Date:Oct 02, 2025
(Q2-2026)
| % Change Since: |
Next Earnings Date:Apr 16, 2026
Earnings Call Sentiment Positive
The earnings call reflects a strong performance with significant revenue growth, market share gains, and enhanced customer engagement. However, challenges such as increased net debt and operating cost pressures were noted.Q2-2026 Updates
Positive Updates
Overall Revenue Growth
Group sales grew by 5.1% with growth in all operating segments, and adjusted operating profit increased by 1.6%.
Market Share Gains
Tesco continued to grow market share in the UK, now over 28%, and achieved consistent gains for over 2 years.
Strong Online Performance
UK online sales grew by 11.4%, with a market share gain of 112 basis points, and the Whoosh rapid delivery service grew by 60%.
Net Promoter Score Improvement
Net Promoter Score reached its highest level in 6 years, indicating improved customer satisfaction.
Clubcard Engagement
Clubcard penetration is around 85% across the group, with new partnerships and benefits enhancing customer engagement.
Sustainability Initiatives
Continued investment in sustainability, including procurement of renewable electricity and initiatives to support UK farming.
Strong Cash Generation
GBP 1.3 billion of free cash flow was generated in the half, with a buyback program returning half of the GBP 700 million proceeds from the sale of banking operations.
Negative Updates
Net Debt Increase
Net debt was GBP 9.88 billion at the end of the half, an increase of GBP 430 million versus year-end.
Operating Cost Pressures
Operating cost inflation and new levies such as the EPR levy impacted profit margins.
Challenges in Central Europe
Central Europe adjusted operating profit was down GBP 5 million due to competitive pressures and lower rental income.
Booker Tobacco Decline
Continued decline in the tobacco market affected Booker's overall sales growth.
Company Guidance
In the recent call, the company reported a solid financial performance for the first half of the fiscal year 2026, driven by strategic investments and customer satisfaction. Group sales increased by 5.1%, with a 4.3% rise in like-for-like sales and a 1.6% increase in adjusted operating profit. The company highlighted its robust market share gains, with the U.K. market share now exceeding 28%. Notably, the company has seen a 16% year-on-year growth in its Finest range, marking three consecutive years of double-digit growth. The Net Promoter Score reached its highest level in six years, reflecting improved customer satisfaction. Furthermore, the company reported a free cash flow of GBP 1.3 billion and adjusted its full-year group adjusted operating profit guidance to a range of GBP 2.9 billion to GBP 3.1 billion. Investments in value, quality, and service, alongside a focus on price competitiveness, have been key drivers of their performance.Tesco Financial Statement Overview
Summary
Tesco shows strong financial performance with consistent revenue growth and improving profitability. The balance sheet is stable, though leverage needs monitoring. Cash flow is solid but declining free cash flow requires attention.Income Statement
Tesco's income statement shows solid revenue growth over the years, with a Total Revenue increase from 2024 to 2025 by 2.54%. The Gross Profit Margin for 2025 stands at 7.22%, indicating efficient cost management. The Net Profit Margin improved to 2.33% in 2025, reflecting enhanced profitability. EBIT and EBITDA margins are strong at 3.88% and 6.82%, respectively, demonstrating operational efficiency. Overall, Tesco is on a positive trajectory with consistent revenue growth and improving margins.75
Positive
Balance Sheet
Tesco's balance sheet indicates a stable financial position with a Debt-to-Equity Ratio of 1.26, reflecting a moderate level of leverage. Return on Equity (ROE) improved to 13.94% in 2025, highlighting effective use of equity capital. The Equity Ratio is 29.98%, demonstrating a balanced capital structure. While leverage remains a potential risk, Tesco's equity base and ROE suggest strong shareholder returns.70
Positive
Cash Flow
Tesco's cash flow position shows a decrease in Free Cash Flow from 2024 to 2025 by -43.65%, which could be a concern. The Operating Cash Flow to Net Income Ratio is 1.80 in 2025, indicating strong cash generation relative to net income. However, the Free Cash Flow to Net Income Ratio dropped to 0.85, suggesting potential cash flow challenges. Overall, while Tesco generates solid operating cash, the drop in free cash flow warrants attention.68
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 69.92B | 69.92B | 68.19B | 65.76B | 61.34B | 57.89B |
| Gross Profit | 5.05B | 5.05B | 4.66B | 4.68B | 4.69B | 3.86B |
| EBITDA | 4.77B | 4.77B | 4.83B | 3.23B | 4.40B | 3.10B |
| Net Income | 1.63B | 1.63B | 1.19B | 737.00M | 1.48B | 690.00M |
Balance Sheet | ||||||
| Total Assets | 38.84B | 38.84B | 47.04B | 46.13B | 49.35B | 45.51B |
| Cash, Cash Equivalents and Short-Term Investments | 4.48B | 4.48B | 4.67B | 4.45B | 4.65B | 3.70B |
| Total Debt | 14.67B | 14.67B | 14.84B | 15.08B | 15.36B | 15.67B |
| Total Liabilities | 27.23B | 27.23B | 35.37B | 33.90B | 33.71B | 33.45B |
| Stockholders Equity | 11.67B | 11.67B | 11.67B | 12.24B | 15.66B | 12.08B |
Cash Flow | ||||||
| Free Cash Flow | 1.68B | 1.68B | 2.73B | 2.56B | 2.61B | -737.00M |
| Operating Cash Flow | 2.92B | 2.92B | 3.84B | 3.81B | 3.79B | 640.00M |
| Investing Cash Flow | -441.00M | -441.00M | -1.70B | -790.00M | -1.77B | 6.13B |
| Financing Cash Flow | -2.94B | -2.94B | -1.86B | -3.19B | -2.23B | -7.84B |
Tesco Technical Analysis
Positive
17.82
Price Trends
17.41
Positive
16.82
Positive
15.19
Positive
Market Momentum
0.16
Positive
51.95
Neutral
69.61
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSCDY, the sentiment is Positive. The current price of 17.82 is above the 20-day moving average (MA) of 17.82, above the 50-day MA of 17.41, and above the 200-day MA of 15.19, indicating a bullish trend. The MACD of 0.16 indicates Positive momentum. The RSI at 51.95 is Neutral, neither overbought nor oversold. The STOCH value of 69.61 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSCDY.
Tesco Risk Analysis
Tesco disclosed 15 risk factors in its most recent earnings report. Tesco 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 Peers Comparison
UnderperformOutperform
Sector (62)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $38.52B | 19.95 | 13.43% | 3.02% | 4.52% | -17.11% | |
72 Outperform | $10.05B | 21.50 | 36.94% | ― | 16.83% | 52.71% | |
71 Outperform | $44.32B | 16.93 | 24.83% | 1.94% | -2.13% | 3.22% | |
66 Neutral | $1.70B | 17.10 | 7.86% | 2.00% | 2.49% | 15.99% | |
62 Neutral | $20.33B | 14.63 | -3.31% | 3.23% | 1.93% | -12.26% | |
60 Neutral | $9.62B | 10.48 | 31.10% | 3.30% | 1.96% | -14.99% | |
54 Neutral | $1.57B | 194.96 | 0.68% | ― | 8.47% | -85.17% |
* Consumer Defensive Sector Average
TSCDY
Tesco
17.82
4.26
31.42%
KR
Kroger Company
67.56
13.46
24.88%
WMK
Weis Markets
68.16
4.97
7.87%
SFM
Sprouts Farmers
104.05
-8.88
-7.86%
GO
Grocery Outlet Holding
15.46
-0.26
-1.65%
ACI
Albertsons Companies
17.29
-0.50
-2.81%
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.