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TSCO

Tesco LSE:TSCO Stock Report

Last Price

UK£2.63

Market Cap

UK£19.6b

7D

0.5%

1Y

8.4%

Updated

12 Aug, 2022

Data

Company Financials +
TSCO fundamental analysis
Snowflake Score
Valuation4/6
Future Growth1/6
Past Performance5/6
Financial Health4/6
Dividends3/6

TSCO Stock Overview

Tesco PLC, together with its subsidiaries, engages in retailing and retail banking activities.

Tesco Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Tesco
Historical stock prices
Current Share PriceUK£2.63
52 Week HighUK£3.04
52 Week LowUK£2.39
Beta0.53
1 Month Change2.57%
3 Month Change-6.33%
1 Year Change8.42%
3 Year Change-3.77%
5 Year Change17.78%
Change since IPO168.90%

Recent News & Updates

Shareholder Returns

TSCOGB Consumer RetailingGB Market
7D0.5%0.03%-0.3%
1Y8.4%-19.7%-9.1%

Return vs Industry: TSCO exceeded the UK Consumer Retailing industry which returned -19.7% over the past year.

Return vs Market: TSCO exceeded the UK Market which returned -9.1% over the past year.

Price Volatility

Is TSCO's price volatile compared to industry and market?
TSCO volatility
TSCO Average Weekly Movement3.1%
Consumer Retailing Industry Average Movement5.7%
Market Average Movement5.4%
10% most volatile stocks in GB Market10.8%
10% least volatile stocks in GB Market2.7%

Stable Share Price: TSCO is less volatile than 75% of UK stocks over the past 3 months, typically moving +/- 3% a week.

Volatility Over Time: TSCO's weekly volatility (3%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
1919345,000Ken Murphyhttps://www.tescoplc.com

Tesco 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.

Tesco Fundamentals Summary

How do Tesco's earnings and revenue compare to its market cap?
TSCO fundamental statistics
Market CapUK£19.60b
Earnings (TTM)UK£1.52b
Revenue (TTM)UK£61.34b

12.9x

P/E Ratio

0.3x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
TSCO income statement (TTM)
RevenueUK£61.34b
Cost of RevenueUK£56.51b
Gross ProfitUK£4.24b
Other ExpensesUK£2.71b
EarningsUK£1.52b

Last Reported Earnings

Feb 26, 2022

Next Earnings Date

Oct 05, 2022

Earnings per share (EPS)0.20
Gross Margin6.90%
Net Profit Margin2.48%
Debt/Equity Ratio47.3%

How did TSCO perform over the long term?

See historical performance and comparison

Dividends

4.1%

Current Dividend Yield

55%

Payout Ratio
We’ve recently updated our valuation analysis.

Valuation

Is TSCO undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

4/6

Valuation Score 4/6

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for TSCO?

Other financial metrics that can be useful for relative valuation.

TSCO key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue0.5x
Enterprise Value/EBITDA7.9x
PEG Ratio3.9x

Price to Earnings Ratio vs Peers

How does TSCO's PE Ratio compare to its peers?

TSCO PE Ratio vs Peers
The above table shows the PE ratio for TSCO vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPEEstimated GrowthMarket Cap
Peer Average16.8x
SBRY J Sainsbury
7.5x-12.9%UK£5.1b
MKS Marks and Spencer Group
8.7x6.8%UK£2.7b
FIVE X5 Retail Group
2x48.6%US$1.6b
WINE Naked Wines
48.9x-53.4%UK£116.6m
TSCO Tesco
12.9x3.3%UK£19.6b

Price-To-Earnings vs Peers: TSCO is good value based on its Price-To-Earnings Ratio (12.9x) compared to the peer average (16.8x).


Price to Earnings Ratio vs Industry

How does TSCO's PE Ratio compare vs other companies in the European Consumer Retailing Industry?

Price-To-Earnings vs Industry: TSCO is expensive based on its Price-To-Earnings Ratio (12.9x) compared to the UK Consumer Retailing industry average (12.5x)


Price to Earnings Ratio vs Fair Ratio

What is TSCO's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

TSCO PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio12.9x
Fair PE Ratio15.3x

Price-To-Earnings vs Fair Ratio: TSCO is good value based on its Price-To-Earnings Ratio (12.9x) compared to the estimated Fair Price-To-Earnings Ratio (15.3x).


Share Price vs Fair Value

What is the Fair Price of TSCO when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: TSCO (£2.63) is trading below our estimate of fair value (£5.45)

Significantly Below Fair Value: TSCO is trading below fair value by more than 20%.


Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is less than 20% higher than the current share price.


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Future Growth

How is Tesco forecast to perform in the next 1 to 3 years based on estimates from 13 analysts?

Future Growth Score

1/6

Future Growth Score 1/6

  • Earnings vs Savings Rate

  • Earnings vs Market

  • High Growth Earnings

  • Revenue vs Market

  • High Growth Revenue

  • Future ROE


3.3%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: TSCO's forecast earnings growth (3.3% per year) is above the savings rate (0.9%).

Earnings vs Market: TSCO's earnings (3.3% per year) are forecast to grow slower than the UK market (9.4% per year).

High Growth Earnings: TSCO's earnings are forecast to grow, but not significantly.

Revenue vs Market: TSCO's revenue (2.2% per year) is forecast to grow slower than the UK market (4.2% per year).

High Growth Revenue: TSCO's revenue (2.2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: TSCO's Return on Equity is forecast to be low in 3 years time (11.5%).


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Past Performance

How has Tesco performed over the past 5 years?

Past Performance Score

5/6

Past Performance Score 5/6

  • Quality Earnings

  • Growing Profit Margin

  • Earnings Trend

  • Accelerating Growth

  • Earnings vs Industry

  • High ROE


14.1%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: TSCO has high quality earnings.

Growing Profit Margin: TSCO's current net profit margins (2.5%) are higher than last year (0.9%).


Past Earnings Growth Analysis

Earnings Trend: TSCO's earnings have grown by 14.1% per year over the past 5 years.

Accelerating Growth: TSCO's earnings growth over the past year (186.6%) exceeds its 5-year average (14.1% per year).

Earnings vs Industry: TSCO earnings growth over the past year (186.6%) exceeded the Consumer Retailing industry 25.2%.


Return on Equity

High ROE: TSCO's Return on Equity (9.7%) is considered low.


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Financial Health

How is Tesco's financial position?

Financial Health Score

4/6

Financial Health Score 4/6

  • Short Term Liabilities

  • Long Term Liabilities

  • Debt Level

  • Reducing Debt

  • Debt Coverage

  • Interest Coverage

Financial Position Analysis

Short Term Liabilities: TSCO's short term assets (£12.2B) do not cover its short term liabilities (£16.1B).

Long Term Liabilities: TSCO's short term assets (£12.2B) do not cover its long term liabilities (£17.6B).


Debt to Equity History and Analysis

Debt Level: TSCO's net debt to equity ratio (19%) is considered satisfactory.

Reducing Debt: TSCO's debt to equity ratio has reduced from 184.9% to 47.3% over the past 5 years.

Debt Coverage: TSCO's debt is well covered by operating cash flow (50.8%).

Interest Coverage: TSCO's interest payments on its debt are well covered by EBIT (4.3x coverage).


Balance Sheet


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Dividend

What is Tesco current dividend yield, its reliability and sustainability?

Dividend Score

3/6

Dividend Score 3/6

  • Notable Dividend

  • High Dividend

  • Stable Dividend

  • Growing Dividend

  • Earnings Coverage

  • Cash Flow Coverage


4.14%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: TSCO's dividend (4.14%) is higher than the bottom 25% of dividend payers in the UK market (1.83%).

High Dividend: TSCO's dividend (4.14%) is low compared to the top 25% of dividend payers in the UK market (5.13%).


Stability and Growth of Payments

Stable Dividend: TSCO's dividend payments have been volatile in the past 10 years.

Growing Dividend: TSCO's dividend payments have fallen over the past 10 years.


Earnings Payout to Shareholders

Earnings Coverage: With its reasonable payout ratio (54.9%), TSCO's dividend payments are covered by earnings.


Cash Payout to Shareholders

Cash Flow Coverage: With its reasonably low cash payout ratio (31.4%), TSCO's dividend payments are well covered by cash flows.


Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

4.3yrs

Average management tenure


CEO

Ken Murphy (55 yo)

1.83yrs

Tenure

UK£4,745,000

Compensation

Mr. Ken Murphy has been Group Chief Executive Officer and Executive Director of Tesco PLC since October 1, 2020. Mr. Murphy served as Joint Chief Operating Officer at Boots UK & Ireland. Mr. Murphy has dee...


CEO Compensation Analysis

Compensation vs Market: Ken's total compensation ($USD5.75M) is about average for companies of similar size in the UK market ($USD5.07M).

Compensation vs Earnings: Insufficient data to compare Ken's compensation with company performance.


Leadership Team

Experienced Management: TSCO's management team is considered experienced (4.3 years average tenure).


Board Members

Experienced Board: TSCO's board of directors are considered experienced (3.9 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Tesco PLC's employee growth, exchange listings and data sources


Key Information

  • Name: Tesco PLC
  • Ticker: TSCO
  • Exchange: LSE
  • Founded: 1919
  • Industry: Food Retail
  • Sector: Consumer Retailing
  • Implied Market Cap: UK£19.596b
  • Shares outstanding: 7.44b
  • Website: https://www.tescoplc.com

Number of Employees


Location

  • Tesco PLC
  • Tesco House
  • Shire Park
  • Welwyn Garden City
  • Herefordshire
  • AL7 1GA
  • United Kingdom

Listings


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/08/12 00:00
End of Day Share Price2022/08/12 00:00
Earnings2022/02/26
Annual Earnings2022/02/26


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.