Tesco's analyst price target has increased from 400 GBp to 450 GBp. Analysts cite stronger earnings estimates and the company being placed on a "Positive Catalyst Watch" ahead of upcoming results.
Analyst Commentary
Bullish Takeaways- Bullish analysts raised Tesco’s price target to 450 GBp, reflecting increased confidence in the company’s growth trajectory and financial performance.
- Upward earnings estimate revisions, including a 17% increase to first half forecasts and further improvement projected for FY26 and beyond, suggest a solid outlook that surpasses previous company guidance.
- Placement on "Positive Catalyst Watch" signals expectation of further near-term momentum, particularly with upcoming earnings events seen as potential drivers of additional upside.
- Valuation remains attractive as analysts view Tesco’s execution and underlying business resilience as key factors supporting continued re-rating of the shares.
- Some industry observers note that bullish sentiment is partly driven by elevated expectations for upcoming results, which could introduce downside risk if performance falls short.
- Long-term guidance assumptions being above company guidance could set a higher bar that may prove challenging in a fluctuating macroeconomic environment.
- Cautious analysts point to sector-wide uncertainty and competitive dynamics as ongoing risks that could impact margins or slow growth momentum, despite recent positive revisions.
What's in the News
- Tesco PLC announced an interim dividend of 4.80 pence per ordinary share for the 26 weeks ended 23 August 2025. The dividend is scheduled to be paid on 21 November 2025 to eligible shareholders.
- Shareholders may choose to reinvest their dividend through the Dividend Reinvestment Plan. Elections must be submitted by 31 October 2025.
Valuation Changes
- Discount Rate: fallen slightly from 7.80% to 7.78%, indicating a marginal decrease in perceived risk or required return.
- Revenue Growth: declined fractionally from 2.82% to 2.81%, suggesting expectations for growth are largely flat but slightly more conservative.
- Net Profit Margin: decreased marginally from 2.76% to 2.76%, reflecting a minor adjustment in expected profitability.
- Future P/E: risen slightly from 16.42x to 16.43x, which points to a very modest change in forward valuation multiples assigned to Tesco’s earnings.
- Fair Value: remained unchanged at £4.70 per share, showing no reassessment of intrinsic value at this time.
Disclaimer
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