Bullish On Tesco Stock Price

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Bullish On Tesco Stock Price

Analysts Are Bullish On Tesco Stock Price

Tesco (TSCO) share price has gained an upside of 80% in the last 5 years. During that period, the company also maintained a juicy dividend yield.

Tesco has also emerged as a leader in the grocery sector with a market share of 28%. Meanwhile, Sainsbury's market share is only 15.3%.

Tesco Has Strong Free Cash Flow

However, Tesco's stock price is still below the all-time high of 489p. That high was achieved back in 2007, which was 19 years ago. At that time, the price crashed due to the financial crisis, and Tesco has failed to set a new high since then.

But this story of comeback also tells us a lot about Tesco's recovery. The company took its sweet time but has managed to get close to a 19-year high once again.

The full-year sales in 2026 were 66.6 billion, with an increase of 4.3%. This may sound small, but it is a solid rise when we look at the overall sector and the scale of Tesco.

The free cash flow of Tesco is also sitting near 2 billion. This is more than enough for Tesco to keep paying dividends to its investors. The company also uses that money for share buybacks, which ultimately pushes the stock price higher.

However, we must also acknowledge that Tesco stock has only gained 8.8% in the last year. The P/E ratio is now near 15.75, and the dividend yield has gone down to 3.14%.

Also, Tesco operating margins ar very thin, and inflation is making things worse. It's safe to say that the macro environment looks very challenging for Tesco.

Despite these challenges, the analysts remain bullish on the Tesco stock. The average target of around 13 analysts is 517p for the Tesco stock price. This means an upside of 12.2%. When we also account for the dividends, the expected return could be around 15%.

So, there are some real challenges being faced by Tesco stock. However, analysts have maintained a buy rating for the Tesco stock.

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