Tesco stock forecast
Tesco’s weighted scenario reaches 600.95p in October 2029. It hinges on cash-and-margin execution.
Where could Tesco’s shares be by October 2029?
Tesco’s probability-weighted path points to moderate returns, with considerable risk around the central case. The forecast gives weighted prices of 549.60p in October 2027, 573.66p in October 2028 and 600.95p in October 2029, equal to returns including dividends of 11%, 19% and 28%. Today’s reference price is 508.20p. By October 2029, the bear-to-bull range runs from 333.43p to 923.86p.
| Case | Probability | October 2027 | October 2028 | October 2029 |
|---|---|---|---|---|
| Bear | 25 % | 391.71 (-20 %) | 358.10 (-24 %) | 333.43 (-26 %) |
| Base | 55 % | 574.15 (+16 %) | 591.25 (+23 %) | 605.13 (+29 %) |
| Bull | 20 % | 679.43 (+37 %) | 794.75 (+63 %) | 923.86 (+92 %) |
| Weighted | 100 % | 549.60 (+11 %) | 573.66 (+19 %) | 600.95 (+28 %) |
What has to go right for Tesco, and what could go wrong?
The bear row falls from £1,850m to £1,799m as revenue grows only 2% and margin compresses to 2.30%. The bull row rises from £2,300m to £2,653m as 4% revenue growth combines with margins reaching 3.20%. The bear reflects thin margins, price competition and wage pressure; the bull requires share gains, Clubcard engagement, better online density and automation to outweigh those costs.
Tesco’s upside is a cash-and-margin execution story, not simply a sales-growth story.
How much cash does Tesco really make?
Tesco must maintain stores, refrigeration, vehicles, warehouses and software. Capital spending reached £1,660m, while lease payments were £667m. A broader calculation produced free cash flow of £1,393m. Tesco reported £1,957m under its own definition, which treats some property and adjusting payments differently.
Share-based pay is also an economic cost because employees receive ownership that would otherwise belong to existing shareholders. Deducting £105m produced an analytical real free cash flow of £1,288m, or 19.50p per diluted share. This is not a separate statutory cash line, and careless adjustments can count some share-related cash costs twice.
| Year to Feb 2026 | Year to Feb 2025 | Year to Feb 2024 | Year to Feb 2023 | Year to Feb 2022 | |
|---|---|---|---|---|---|
| Cash from operations | 3,720 | 3,479 | 3,712 | 3,752 | 3,614 |
| Capital spending | 1,660 | 1,525 | 1,348 | 1,197 | 1,130 |
| Lease payments | 667 | 595 | 623 | 589 | 571 |
| Free cash flow (calculated) | 1,393 | 1,359 | 1,741 | 1,966 | 1,913 |
| Stock-based pay | 105 | 119 | 123 | 101 | 109 |
| Real free cash flow (after stock pay) (calculated) | 1,288 | 1,240 | 1,618 | 1,865 | 1,804 |
What does an investor pay for Tesco today?
| Today (Oct 9, 2026) | |
|---|---|
| Share price | 508.20 |
| Market value (calculated) | 31,839.4 |
| Enterprise value (calculated) | 41,876.4 |
| P/E, last 12 months (calculated) | 17.2x |
| Free cash flow yield (calculated) | 6.1% |
| Dividend yield (calculated) | 2.9% |