Update shared on 29 Nov 2025
Tesco’s analyst price target was raised from 400 GBp to 450 GBp, as analysts cited improved earnings forecasts and the company’s placement on a positive catalyst watch in advance of its upcoming results.
Analyst Commentary
Analyst sentiment on Tesco has become increasingly positive following recent revisions to earnings estimates and a notable upgrade in the company's price target. The following points summarize current bullish and bearish perspectives from industry analysts:
Bullish Takeaways- Bullish analysts have raised their price targets for Tesco, citing improved earnings forecasts that exceed the company's own guidance.
- Tesco has been placed on a "Positive Catalyst Watch" ahead of its upcoming earnings report. This indicates that some believe catalysts could drive shares higher in the near term.
- Upward revisions to first half estimates, as well as stronger projections for fiscal 2026 and beyond, reflect confidence in the company's growth trajectory and execution capabilities.
- Improved sentiment is bolstered by a view that Tesco’s positioning and operational strengths could help it outperform expectations relative to its historical average valuation.
- Bearish analysts remain cautious about the sustainability of recent earnings strength, especially given ongoing consumer uncertainty.
- Concerns persist around external risks that might limit Tesco’s ability to deliver on elevated forecasts over the medium to long term.
- There are reservations regarding potential headwinds from broader market factors or shifts in consumer behavior that could impact top-line growth.
What's in the News
- Pacvue has partnered with Tesco Media to enhance retail media activation. This partnership enables brands to optimize and measure sponsored product campaigns on Tesco alongside other markets, with a new "Sales at Checkout" reporting metric and automation tools now available. (Key Developments)
- Solution International’s ‘Grow with Peppa’ character merchandise has expanded its reach in Tesco stores and online platforms across the UK and Ireland. The campaign aims for strong engagement in the baby feeding category and is expecting over SEK 3 million in annual revenue. (Key Developments)
- Tesco announced an interim dividend of 4.80 pence per share for the 26 weeks ended 23 August 2025. The dividend is to be paid on 21 November 2025, aligned with their dividend policy. (Key Developments)
Valuation Changes
- Discount rate has decreased slightly from 7.99% to 7.95%, reflecting a marginal improvement in perceived risk or cost of capital assumptions.
- Revenue growth projections remain effectively unchanged at approximately 2.81%, indicating continued stable growth expectations.
- Net profit margin holds steady at about 2.76%, with no material revision from previous forecasts.
- Future P/E ratio has decreased marginally from 16.53x to 16.51x, suggesting a modest adjustment to valuation multiples based on forward earnings.
Disclaimer
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