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

6.3%

TSCO

4.4%

GB Consumer Retailing

2.3%

GB Market


1 Year Return

17.1%

TSCO

6.3%

GB Consumer Retailing

2.5%

GB Market

Return vs Industry: TSCO exceeded the UK Consumer Retailing industry which returned 6.3% over the past year.

Return vs Market: TSCO exceeded the UK Market which returned 2.5% over the past year.


Shareholder returns

TSCOIndustryMarket
7 Day6.3%4.4%2.3%
30 Day1.6%-1.9%-1.3%
90 Day2.4%0.05%-1.9%
1 Year20.5%17.1%10.4%6.3%7.4%2.5%
3 Year23.2%17.2%9.1%1.4%18.8%4.3%
5 Year39.0%31.4%25.2%13.3%36.4%6.8%

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 compared to its fair value and its price relative to the market?

41.7%

Undervalued compared to fair value


Share Price vs. Fair Value

Undervalued: TSCO (£2.44) is trading below our estimate of fair value (£4.19)

Significantly Undervalued: TSCO is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: TSCO is good value based on its PE Ratio (18.1x) compared to the Consumer Retailing industry average (21.8x).

PE vs Market: TSCO is poor value based on its PE Ratio (18.1x) compared to the UK market (16.4x).


Price to Earnings Growth Ratio

Low PEG Ratio: TSCO is poor value based on its PEG Ratio (1.3x)


Price to Book Ratio

PB vs Industry: TSCO is overvalued based on its PB Ratio (1.7x) compared to the GB Consumer Retailing industry average (1.6x).


Next Steps

Future Growth

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

13.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: TSCO's forecast earnings growth (13.6% per year) is above the savings rate (1.2%).

Earnings vs Market: TSCO's earnings (13.6% per year) are forecast to grow faster than the UK market (12.4% per year).

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

Revenue vs Market: TSCO's revenue (2% per year) is forecast to grow slower than the UK market (4.1% per year).

High Growth Revenue: TSCO's revenue (2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

High Future ROE: TSCO's Return on Equity is forecast to be low in 3 years time (11.2%).


Next Steps

Past Performance

How has Tesco performed over the past 5 years?

67.4%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: TSCO's earnings have grown significantly by 67.4% per year over the past 5 years.

Accelerating Growth: TSCO's earnings growth over the past year (43.5%) is below its 5-year average (67.4% per year).

Earnings vs Industry: TSCO earnings growth over the past year (43.5%) exceeded the Consumer Retailing industry -1.4%.


Return on Equity

High ROE: TSCO's Return on Equity (9.4%) is considered low.


Return on Assets

ROA vs Industry: TSCO's Return on Assets is below or equal to the Consumer Retailing industry average last year.


Return on Capital Employed

ROCE Improving: TSCO has significantly improved its Return on Capital Employed over the past 3 years.


Next Steps

Financial Health

How is Tesco's financial position?


Financial Position Analysis

Short Term Liabilities: TSCO's short term assets (£16.4B) do not cover its short term liabilities (£20.6B)

Long Term Liabilities: TSCO's short term assets (16.4B) do not cover its long term liabilities (22.6B)


Debt to Equity History and Analysis

Debt Level: TSCO's debt to equity ratio (49.5%) is considered high

Reducing Debt: TSCO's debt to equity ratio has reduced from 102.9% to 49.5% over the past 5 years.

Debt Coverage: TSCO's debt is well covered by operating cash flow (30.2%).

Interest Coverage: TSCO's interest payments on its debt are well covered by EBIT (11.2x coverage).


Balance Sheet

Inventory Level: TSCO has a high level of physical assets or inventory.

Debt Coverage by Assets: TSCO's debt is covered by short term assets (assets are 2.365130x debt).


Next Steps

Dividend

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

2.36%

Current Dividend Yield


Dividend Yield vs Market

company2.4%marketbottom25%2.0%markettop25%5.4%industryaverage3.5%forecastin3Years3.8%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: TSCO's dividend (2.36%) is higher than the bottom 25% of dividend payers in the UK market (2%).

High Dividend: TSCO's dividend (2.36%) is low compared to the top 25% of dividend payers in the UK market (5.44%).

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.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (50.1%), TSCO's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: TSCO's dividends in 3 years are forecast to be covered by earnings (55.9% payout ratio).


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)

5.1yrs

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

Compensation vs. Market: Dave's total compensation ($USD5.86M) is about average for companies of similar size in the UK market ($USD4.59M).

Compensation vs Earnings: Dave's compensation has been consistent with company performance over the past year.


Management Age and Tenure

1.3yrs

Average Tenure

54yo

Average Age

Experienced Management: TSCO's management team is not considered experienced ( 1.3 years average tenure), which suggests a new team.


Board Age and Tenure

4.5yrs

Average Tenure

61.5yo

Average Age

Experienced Board: TSCO's board of directors are considered experienced (4.5 years average tenure).


Insider Trading

Insider Buying: TSCO insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyUK£35,31004 Oct 19
A. B. Olsson
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares15,000
Max PriceUK£2.35
BuyUK£71830 Nov 18
Stewart Gilliland
EntityIndividual
Shares348
Max PriceUK£2.06

Ownership Breakdown


Management Team

  • Sarah Fitzgerald

    Head of Buying

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

    Chief Executive Officer of Booker

    • Tenure: 1.3yrs
    • Compensation: UK£835.40k
  • Alan James Stewart (59yo)

    CFO & Executive Director

    • Tenure: 5.1yrs
    • Compensation: UK£2.56m
  • Dave Lewis (54yo)

    Group Chief Executive & Executive Director

    • Tenure: 5.1yrs
    • Compensation: UK£4.60m
  • Tony Hoggett

    Chief Operating Officer

    • Tenure: 1.3yrs
  • Adrian Morris

    Group General Counsel

    • Tenure: 7.1yrs
  • Andrew Yaxley

    Group Chief Product Officer

    • Tenure: 1.3yrs
  • Guus Dekkers

    Chief Technology Officer

    • Tenure: 1.5yrs
  • Natasha Adams

    Chief People Officer

    • Tenure: 1.3yrs
  • Christine Heffernan

    Group Communications Director

    • Tenure: 0.6yrs

Board Members

  • Deanna Oppenheimer (61yo)

    Senior Independent Director

    • Tenure: 2.8yrs
    • Compensation: UK£174.00k
  • Mark Armour (64yo)

    Independent Non-Executive Director

    • Tenure: 6.1yrs
    • Compensation: UK£86.00k
  • Byron Grote (71yo)

    Independent Non-Executive Director

    • Tenure: 4.4yrs
    • Compensation: UK£129.00k
  • John Allan (70yo)

    Non-Executive Chairman

    • Tenure: 4.6yrs
    • Compensation: UK£663.00k
  • Alan James Stewart (59yo)

    CFO & Executive Director

    • Tenure: 5.1yrs
    • Compensation: UK£2.56m
  • Steve Golsby (65yo)

    Independent Non-Executive Director

    • Tenure: 3yrs
    • Compensation: UK£112.00k
  • Dave Lewis (54yo)

    Group Chief Executive & Executive Director

    • Tenure: 5.1yrs
    • Compensation: UK£4.60m
  • Lindsey Pownall (57yo)

    Independent Non-Executive Director

    • Tenure: 3.5yrs
    • Compensation: UK£114.00k
  • Alison Platt (56yo)

    Independent Non-Executive Director

    • Tenure: 3.5yrs
    • Compensation: UK£86.50k
  • A. B. Olsson (62yo)

    Independent Non-Executive Director

    • Tenure: 4.9yrs
    • 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£23.777b
  • Shares outstanding: 9.74b
  • 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 Analysis2019/10/15 20:37
End of Day Share Price2019/10/15 00:00
Earnings2019/08/24
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.