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The Tesco (LSE:TSCO) share price is up an impressive 23% over the past year, hitting fresh 52-week highs last month. At 414p, it’s understandable that some new investors might be questioning if it’s still a smart time to buy the stock, given the ride higher. By examining what leading analysts are expecting, it can help to build a more rounded picture.
What the experts say
There are 13 analysts that I can see who currently have a share price target for Tesco. The highest price is from Deutsche Bank, with a forecast of 470p for the coming year. Other notable banks include Goldman Sachs at 430p and Citi at 460p. The lowest target price is 316p.
The average target from the contributors is 426p. At a broad level, this is a good sign, as it’s higher than the current share price. Admittedly, it’s only 3% higher, so there’s nothing to get that excited about here. However, one takeaway from the analysts is that the bias isn’t for a sudden share price fall.
On the other hand, some might not be too impressed with even the most optimistic outlook from Deutsche Bank. If its forecast is correct, it would signal around 14% of further gains from here. That’s not bad, but considering it’s the highest forecast, it might underwhelm some growth investors.
One important thing to note is that the target prices are just opinions. Sure, the research teams consist of smart people. But these figures shouldn’t be taken as gospel by any means.
Adding in my view
I myself believe that Tesco is well-positioned for a further rally, thanks to its sustained market share gains. It had a whopping 28% supermarket share across the UK as of early 2025, helped by effective value pricing and strong Clubcard-driven loyalty.
And let’s not forget its strong financial performance. Q1 results released in June showed like-for-like sales growth of 4.7% with the company expecting full-year operating profit of around £2.9bn. And there’s £1bn in share buybacks.
It’s also not that expensive, despite the recent rally. With a price-to-earnings ratio of 14.96, it’s below the FTSE 100 average. It’s true that it’s above my benchmark fair value figure of 10, but it isn’t at a high enough level for me to be concerned about the valuation.
That said, risks remain. The supermarket sector is incredibly competitive. Further, rising regulatory and cost burdens, which include elevated business rates for large stores and wage inflation, could erode earnings if left unmanaged.
Ultimately, I agree with the average view from analysts that the stock could offer some marginal appreciation in the coming year. Yet it’s not a hugely exciting proposition in my view, and I feel I can find better options for my money elsewhere in the stock market.
