Tesco plc (TSCO.L)

Consumer · LSE · UK

£4.78+3.46% today

Fundamentals

Market cap£29.40B

P/E ratio17.5

Dividend yield3.07%

Revenue growth (YoY)+7.2%

Profit margin2.4%

Return on equity15.5%

Next earnings2026-04-16

Valuation and ratings

DCF fair value£10.38

Upside to fair value+117.0%

Analyst target (mean)£5.14

Analyst range£4.60 to £5.50

Analysts covering15

Consensus viewbuy

Moat score33/100

Overall rating66/100, Buy

Tesco plc trades at £4.78, which is 117% below the £10.38 our discounted cash flow model puts on the business. On that measure alone it screens as undervalued, though a DCF is an argument rather than a measurement, and the market is frequently right about why something is cheap.

Our moat model scores it 33 out of 100, which is little in the way of a moat. A moat is a structural reason competitors cannot take the profits away, and it matters more to a long holding period than any single quarter's numbers do.

It changes hands at 17.5 times earnings. Be careful reading that in isolation: for a cyclical business a low P/E arrives at the top of the cycle, when profits are peaking and about to fall, which is exactly when the shares look cheapest and are not.

About Tesco plc

Tesco PLC, together with its subsidiaries, operates as a grocery retailer in the United Kingdom, Republic of Ireland, the Czech Republic, Slovakia, and Hungary. The company offers grocery products through its stores, as well as online. It is also involved in the food and drink wholesaling activities. In addition, the company provides mobile virtual network operating services, as well as insurance products, such as for home, travel, pet, and car insurance products. Further, the company operates a network of convenience stores; and offers AI-enabled science, software, and trusted advice; and consultancy services. Tesco PLC was founded in 1919 and is based in Welwyn Garden City, the United Kingdom.

Industry: Grocery StoresEmployees: 340,000HQ: United Kingdom

TSCO.L passes 6 of our 30 screens today

Each screen prints the exact criteria it used, and the circumstances in which it is wrong.

Undervalued on cash flow

Companies trading at least 25% below what our discounted cash flow model says the future cash is worth today.

Dividend powerhouses

Yields above 3%, filtered for the one thing yield screens never check: whether the company can actually afford it.

Low volatility defensives

Companies that move less than the market and pay you to wait. The holdings that let you sleep, and let you hold everything else.

Consumer staples

The companies that sell what people buy regardless of the economy. Dull, and dull is the entire point.

UK stocks worth a look

The FTSE is a basket of multinationals that happen to be listed in London. That distinction changes everything about what you are buying.

Dividend aristocrats

Companies with long, unbroken records of raising their dividend. The record is the point: it is evidence, not a promise.

Common questions

Is Tesco plc (TSCO.L) undervalued?

Against our discounted cash flow estimate of £10.38, TSCO.L at £4.78 is 117% below fair value. That is one model's answer, not a recommendation, and most of a DCF's output sits in a terminal value nobody can forecast.

What is TSCO.L's P/E ratio?

TSCO.L trades at 17.5 times earnings. A low P/E is not automatically cheap: on a cyclical company it is usually a warning that earnings are at a peak.

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Data from company filings, exchange quotes and SEC EDGAR 13F disclosures. Quotes are delayed. Metrics we do not have are left out rather than estimated. Educational information, not financial advice.