LSE:TSCO

Stock Analysis Report

Executive Summary

Tesco PLC, together with its subsidiaries, operates as a grocery retailer.

Snowflake

Fundamentals

Fair value with acceptable track record.


Similar Companies

Share Price & News

How has Tesco's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

0.3%

TSCO

-0.6%

GB Consumer Retailing

0.4%

GB Market


1 Year Return

-1.0%

TSCO

-4.5%

GB Consumer Retailing

-0.9%

GB Market

TSCO outperformed the Consumer Retailing industry which returned -3.6% over the past year.

TSCO matched the United Kingdom of Great Britain and Northern Ireland Market (-0.7%) over the past year.


Share holder returns

TSCOIndustryMarket
7 Day0.3%-0.6%0.4%
30 Day9.6%9.3%4.4%
90 Day-0.08%1.6%0.5%
1 Year1.5%-1.0%-1.2%-4.5%3.9%-0.9%
3 Year35.8%30.7%15.5%8.1%20.5%6.1%
5 Year28.5%22.9%18.0%7.5%33.2%5.1%

Price Volatility Vs. Market

How volatile is Tesco's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Tesco undervalued based on future cash flows and its price relative to the stock market?

48%

Discount to future cash flow value


Intrinsic Value Based on Future Cash Flows

Tesco's share price is below the future cash flow value, and at a moderate discount (> 20%).

Tesco's share price is below the future cash flow value, and at a substantial discount (> 40%).


Price Based on Earnings

Tesco is good value based on earnings compared to the GB Consumer Retailing industry average.

Tesco is overvalued based on earnings compared to the United Kingdom of Great Britain and Northern Ireland market.


Price Based on Expected Growth

Tesco is poor value based on expected growth next year.


Price Based on Value of Assets

Tesco is overvalued based on assets compared to the GB Consumer Retailing industry average.


Next Steps

Future Growth

How is Tesco expected to perform in the next 1 to 3 years based on estimates from 16 analysts?

10.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Estimates


Future Annual Growth Analysis

Tesco's revenue is expected to grow by 2.1% yearly, however this is not considered high growth (20% yearly).

Tesco's earnings are expected to grow by 10.4% yearly, however this is not considered high growth (20% yearly).

Tesco's revenue growth is positive but not above the United Kingdom of Great Britain and Northern Ireland market average.

Tesco's earnings growth is positive but not above the United Kingdom of Great Britain and Northern Ireland market average.

Tesco's earnings growth is expected to exceed the low risk savings rate of 1.2%.


Earnings per Share Growth Estimates


Future Return on Equity

Tesco is not expected to efficiently use shareholders’ funds in the future (Return on Equity less than 20%).


Next Steps

Past Performance

How has Tesco performed over the past 5 years?

39.2%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Tesco has delivered over 20% year on year earnings growth in the past 5 years.

Tesco's 1-year earnings growth is less than its 5-year average (33.7% vs 39.2%)

Tesco's earnings growth has exceeded the GB Consumer Retailing industry average in the past year (33.7% vs -1.4%).


Return on Equity

Tesco has not efficiently used shareholders’ funds last year (Return on Equity less than 20%).


Return on Assets

Tesco used its assets less efficiently than the GB Consumer Retailing industry average last year based on Return on Assets.


Return on Capital Employed

Tesco has significantly improved its use of capital last year versus 3 years ago (Return on Capital Employed).


Next Steps

Financial Health

How is Tesco's financial position?


Financial Position Analysis

Tesco's short term (1 year) commitments are greater than its holdings of cash and other short term assets.

Tesco's long term commitments exceed its cash and other short term assets.


Debt to Equity History and Analysis

Tesco's level of debt (48.2%) compared to net worth is high (greater than 40%).

The level of debt compared to net worth has been reduced over the past 5 years (76.9% vs 48.2% today).

Debt is well covered by operating cash flow (27.5%, greater than 20% of total debt).

Interest payments on debt are well covered by earnings (EBIT is 7.7x coverage).


Balance Sheet

High level of physical assets or inventory.

Debt is covered by short term assets, assets are 1.8x debt.


Next Steps

Dividend

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

3.90%

Expected Dividend Yield


Dividend Yield and Payments Analysis

Tesco's pays a higher dividend yield than the bottom 25% of dividend payers in United Kingdom of Great Britain and Northern Ireland (2.02%).

Tesco's dividend is below the markets top 25% of dividend payers in United Kingdom of Great Britain and Northern Ireland (5.49%).

Dividends per share have been volatile in the past 10 years (annual drop of over 20%).

Dividends per share have fallen over the past 10 years.


Current Payout to Shareholders

Dividends paid are well covered by earnings (2.4x coverage).


Future Payout to Shareholders

Dividends after 3 years are expected to be covered by earnings (1.9x coverage).


Next Steps

Management

What is the CEO of Tesco's salary, the management and board of directors tenure and is there insider trading?

1.3yrs

Average management tenure


CEO

Dave Lewis (54yo)

5yrs

Tenure

UK£4,600,000

Compensation

Mr. David Lewis, also known as Dave, has been the Group Chief Executive Officer and Executive Director at Tesco PLC since September 01, 2014. Mr. Lewis served as the President of Personal Care for Skin, De ...


CEO Compensation Analysis

Dave's remuneration is about average for companies of similar size in United Kingdom of Great Britain and Northern Ireland.

Dave's compensation has been consistent with company performance over the past year, both up more than 20%.


Management Age and Tenure

1.3yrs

Average Tenure

54yo

Average Age

The average tenure for the Tesco management team is less than 2 years, this suggests a new team.


Board Age and Tenure

4.4yrs

Average Tenure

61.5yo

Average Age

The tenure for the Tesco board of directors is about average.


Insider Trading

No 3 month open market individual insider trading information.


Recent Insider Transactions

BuyUK£71830 Nov 18
Stewart Gilliland
EntityIndividual
Shares348
Max PriceUK£2.06
BuyUK£34,93305 Oct 18
Alison Platt
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares16,286
Max PriceUK£2.15
BuyUK£21,54005 Oct 18
A. B. Olsson
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares10,000
Max PriceUK£2.15
BuyUK£106,85005 Oct 18
Alan James Stewart
EntityIndividual
Role
Member of the Board of Directors
CFO & Executive Director
Shares50,000
Max PriceUK£2.14
BuyUK£47,72605 Oct 18
John Allan
EntityIndividual
Role
Chairman of the Board
Non-Executive Chairman
Shares22,000
Max PriceUK£2.21
BuyUK£106,85005 Oct 18
Dave Lewis
EntityIndividual
Role
Chief Executive Officer
Group Chief Executive & Executive Director
Shares50,000
Max PriceUK£2.14

Ownership Breakdown


Management Team

  • Sarah Fitzgerald

    Head of Buying

    • Tenure: 0yrs
  • Charles Wilson (53yo)

    Chief Executive Officer of Booker

    • Tenure: 1.2yrs
    • Compensation: UK£835.40k
  • Alan James Stewart (59yo)

    CFO & Executive Director

    • Tenure: 5yrs
    • Compensation: UK£2.56m
  • Dave Lewis (54yo)

    Group Chief Executive & Executive Director

    • Tenure: 5yrs
    • Compensation: UK£4.60m
  • Tony Hoggett

    Chief Operating Officer

    • Tenure: 1.3yrs
  • Adrian Morris

    Group General Counsel

    • Tenure: 7yrs
  • Andrew Yaxley

    Group Chief Product Officer

    • Tenure: 1.2yrs
  • Guus Dekkers

    Chief Technology Officer

    • Tenure: 1.4yrs
  • Natasha Adams

    Chief People Officer

    • Tenure: 1.3yrs
  • Christine Heffernan

    Group Communications Director

    • Tenure: 0.5yrs

Board Members

  • Deanna Oppenheimer (61yo)

    Senior Independent Director

    • Tenure: 2.7yrs
    • Compensation: UK£174.00k
  • Mark Armour (64yo)

    Independent Non-Executive Director

    • Tenure: 6yrs
    • Compensation: UK£86.00k
  • Byron Grote (71yo)

    Independent Non-Executive Director

    • Tenure: 4.3yrs
    • Compensation: UK£129.00k
  • John Allan (70yo)

    Non-Executive Chairman

    • Tenure: 4.5yrs
    • Compensation: UK£663.00k
  • Alan James Stewart (59yo)

    CFO & Executive Director

    • Tenure: 5yrs
    • Compensation: UK£2.56m
  • Steve Golsby (65yo)

    Independent Non-Executive Director

    • Tenure: 2.9yrs
    • Compensation: UK£112.00k
  • Dave Lewis (54yo)

    Group Chief Executive & Executive Director

    • Tenure: 5yrs
    • Compensation: UK£4.60m
  • Lindsey Pownall (57yo)

    Independent Non-Executive Director

    • Tenure: 3.4yrs
    • Compensation: UK£114.00k
  • Alison Platt (56yo)

    Independent Non-Executive Director

    • Tenure: 3.4yrs
    • Compensation: UK£86.50k
  • A. B. Olsson (62yo)

    Independent Non-Executive Director

    • Tenure: 4.8yrs
    • Compensation: UK£103.00k

Company Information

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


Key Information

  • Name: Tesco PLC
  • Ticker: TSCO
  • Exchange: LSE
  • Founded: 1919
  • Industry: Food Retail
  • Sector: Consumer Retailing
  • Market Cap: UK£23.023b
  • Shares outstanding: 9.73b
  • Website: https://www.tescoplc.com

Number of Employees


Location

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

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
TSCD.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJan 1975
TSCOLSE (London Stock Exchange)YesOrdinary SharesGBGBPJan 1975
TCODB (Deutsche Boerse AG)YesOrdinary SharesDEEURJan 1975
TSCOLBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPJan 1975
TCOXTRA (XETRA Trading Platform)YesOrdinary SharesDEEURJan 1975
TSCO NBMV (Bolsa Mexicana de Valores)YesOrdinary SharesMXMXNJan 1975
TSCOSWX (SIX Swiss Exchange)YesOrdinary SharesCHCHFJan 1975
TSCD.YOTCPK (Pink Sheets LLC)ADR EACH CNV INTO 3 ORD (GBP)USUSDJan 1980
TCO1DB (Deutsche Boerse AG)ADR EACH CNV INTO 3 ORD (GBP)DEEURJan 1980

Biography

Tesco PLC, together with its subsidiaries, operates as a grocery retailer. The company operates through convenience and hypermarket store formats, as well as engages in the wholesale business. It also prov ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/09/19 20:35
End of Day Share Price2019/09/19 00:00
Earnings2019/02/23
Annual Earnings2019/02/23


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.