Update shared on 17 Oct 2025
Fair value Increased 3.11%Digital Investments And Clubcard Offers Will Transform Retail Experiences
Tesco’s analyst price target has been raised, increasing from £4.56 to approximately £4.70 per share. Analysts cite stronger-than-expected earnings forecasts and improved profit margin expectations as their rationale for the update.
Analyst Commentary
Recent updates from the analyst community reflect a range of perspectives on Tesco's outlook, providing both bullish and bearish insights for investors to consider.
Bullish Takeaways- Bullish analysts have raised price targets, highlighting greater confidence in Tesco’s earnings trajectory and profit margins.
- Forecasts for the first half, FY26, and FY27 have been revised upward, with some estimates positioning Tesco comfortably above previous guidance.
- Placement on “Positive Catalyst Watch” ahead of upcoming earnings indicates the potential for further positive surprises and upside revisions.
- The company's ability to outperform expectations is supporting a more favorable view on execution and future growth potential.
- Some analysts remain cautious about the sustainability of recent margin improvements, particularly given the evolving macroeconomic environment.
- There are lingering questions about whether Tesco's near-term momentum can be maintained as investor sentiment becomes more optimistic.
- Uncertainties related to inflation and its impact on consumer spending could pose risks to growth and valuation over the medium term.
What's in the News
- Tractor Supply is expanding its final-mile delivery service to improve digital and business-to-business sales. The company is focusing on deliveries to rural customers by hiring drivers and renting vehicles (The Wall Street Journal).
Valuation Changes
- Consensus Analyst Price Target has risen slightly from £4.56 to approximately £4.70 per share.
- Discount Rate has edged up from 7.76% to 7.80%.
- Revenue Growth projections have fallen modestly, moving from 2.99% to 2.82%.
- Net Profit Margin estimate increased slightly from 2.68% to 2.76%.
- Future P/E ratio has decreased from 17.74x to 16.42x. This change reflects more favorable earnings expectations.
Disclaimer
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