How The Story Behind Tesco (LSE:TSCO) Is Shifting As Analysts Rework Their Targets

Simply Wall St

Wed, February 11, 2026 at 2:07 PM GMT+9 4 min read

In this article:

TSCDF

-7.56%

TSCDY

+0.86%

JPM

-1.19%

Never miss an important update on your stock portfolio and cut through the noise. Over 7 million investors trust Simply Wall St to stay informed where it matters for FREE.

Tesco’s latest price target reset is more of a fine tune than a rewrite, with the modelled fair value essentially steady at £4.74 while the average analyst target now sits closer to £4.80 after JPMorgan trimmed its figure to 480 GBp from 500 GBp. The key shift is a slightly higher 8.19% discount rate applied to largely unchanged long term revenue growth of 2.87%, which helps explain why targets are easing even though the core cash flow story is left intact. As this article unfolds, you will see how these kinds of small modelling tweaks shape the story around Tesco stock and how you can stay on top of those narrative shifts as they happen.

Stay updated as the Fair Value for Tesco shifts by adding it to your watchlist or portfolio. Alternatively, explore our Community to discover new perspectives on Tesco.

What Wall Street Has Been Saying

🐂 Bullish Takeaways

JPMorgan remains positive on Tesco, keeping an Overweight rating even as it adjusts the price target to 480 GBp from 500 GBp. In its view, the core investment case is intact despite a slightly higher required return in its model.

The JPMorgan stance points to underlying confidence in Tesco’s execution and cash generation. The lower target appears more about fine tuning assumptions than a change in view on the company’s ability to manage costs and run the business efficiently.

For investors, this indicates that the more supportive voices on the Street are still tying their optimism to Tesco’s operational delivery and cash flow resilience, while accepting that some of the upside may already be reflected in the share price.

🐻 Bearish Takeaways

The same JPMorgan move to trim its target to 480 GBp highlights that at least some analysts see less headroom for Tesco’s valuation. A higher discount rate and largely unchanged growth assumptions imply more caution around risk and required return.

That reset underlines recurring reservations on the name, including concerns that a fair amount of the perceived quality in Tesco’s execution, cost control and growth profile could already be embedded in current market expectations. In their models, this may limit near term upside.

Do your thoughts align with the Bull or Bear Analysts? Perhaps you think there’s more to the story. Head to the Simply Wall St Community to discover more perspectives or begin writing your own Narrative!

LSE:TSCO 1-Year Stock Price Chart

How This Changes the Fair Value For Tesco

Fair Value: The modelled fair value remains essentially unchanged at £4.74, suggesting the overall output of the valuation work is steady even after the latest tweaks.

Discount Rate: The discount rate is set at 8.19%, which means the analyst model is applying a modestly higher required return to Tesco’s future cash flows compared with earlier assumptions.

Revenue Growth: Long term revenue growth is held at 2.87%, so the story on the top line is effectively the same, with only an immaterial numerical adjustment in the model.

Net Profit Margin: The modelled net profit margin stays effectively in line at 2.77%, indicating that expectations for how much profit Tesco converts from each pound of revenue are broadly unchanged.

Future P/E: The assumed future P/E multiple sits at 16.67x, which is broadly stable and points to only a very small adjustment in how the market might price Tesco’s earnings in the model.

 






Story Continues  

🔔 Never Miss an Update: Follow The Narrative

Narratives on Simply Wall St let you turn Tesco’s numbers into a clear story, linking your view on its business to a forecast for revenue, earnings and margins, and then to a fair value. Each Narrative sits inside the Community page, updates automatically when fresh news or earnings arrive, and helps you compare that Fair Value to today’s share price so you can decide if Tesco still fits your plan.

Head over to the Simply Wall St Community and follow the Tesco Narrative to stay in sync with how the story and the numbers evolve around:

How investments in quality, digital expansion and customer experience are feeding into expected revenue growth and market share for Tesco.

Whether cost savings, Clubcard driven loyalty and margin assumptions line up with projected earnings of £2.0b and a future P/E of 16.8x by around 2028.

How risks around competition, household budgets, regulation and supplier costs could challenge the current fair value view and analyst price targets.

Curious how numbers become stories that shape markets? Explore Community Narratives

_ This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned._

Companies discussed in this article include TSCO.L.

Have feedback on this article? Concerned about the content? Get in touch with us directly._ Alternatively, email editorial-team@simplywallst.com_

Terms and Privacy Policy

Privacy Dashboard

More Info