The Tesco (LSE:TSCO) share price has been on fire these past 12 months. The UK’s leading retailer has continued to expand sales volumes, resulting in market share gains that saw the stock price grow by almost 30%!
This success largely stems from two primary factors. Firstly, its price-matching and Clubcard membership scheme has enabled Tesco to remain competitive against budget retailers like Aldi and Lidl.
But more importantly, as household budgets were constrained by inflation, management’s expansion of its premium Finest product range provided a new home for Marks and Spencer and Waitrose shoppers. In fact, volume growth in this part of the business surged by 14.9%!
Subsequently, adjusted operating profit guidance received an upgrade from £2.8bn to £2.9bn for its 2025 fiscal year ending in February. That was ahead of market expectations. And if this upward trend was to continue, it suggests further growth lies ahead for the Tesco share price. So what do the experts now think about this retail business?
The latest price forecast
Overall, the opinions surrounding Tesco from institutional investors are overwhelmingly positive. Of the 16 analysts following the FTSE 100 firm, 13 rate it as either Outperform or Buy, with two recommending Hold and only one saying it’s a Sell.
Do these mostly positive opinions seem justified? Looking at the projections for revenue and earnings, I’m inclined to say yes.
| Revenue | 2025 FY | 2026 FY |
| Highest | £71.04bn | £72.82bn |
| Lowest | £69.43bn | £70.77bn |
| Average Consensus | £70.03bn | £71.70bn |
Compared to the £68.19bn of revenue delivered in its 2024 fiscal year, it’s clear that top-line revenue growth’s far from explosive. However, the projected 2.7% year-on-year increase is notable, ahead of Tesco’s average of 1.6%. And with more customers snapping up its higher margin Finest products, earnings are expected to grow at a far more exciting pace.
| Earnings per Share | 2025 FY | 2026 FY |
| Highest | 28.9p | 30.35p |
| Lowest | 23p | 23p |
| Average Consensus | 26.5p | 28.7p |
A 26.5p projected earnings per share puts earnings growth at 13.2%, paving the way for both debt reduction as well as higher dividends.
Needless to say, the financial forecasts surrounding this business are encouraging. And it’s subsequently translating into bullish predictions for the Tesco share price.
| Opinion | 12-Month Share Price Forecast |
| Optimistic | 445p |
| Average | 407.5p |
| Pessimistic | 365p |
Taking a step back
Looking at the latest Tesco share price forecasts, it seems even the most bearish prediction suggests some growth is on the horizon. And even when taking the average of opinions, shareholders appear to be on track to enjoy further double-digit returns.
However, it’s important to remember that forecasts are not guarantees. Tesco operates in a fiercely competitive industry. And its rivals aren’t going to sit idly by while it takes away their market share.
Now that economic conditions are improving, premium shoppers may start to migrate back to their usual destinations if Tesco can’t hold on. And as for the price matching schemes, the larger margins of discount retailers provide more wiggle room to cut prices without compromising earnings.
There’s also the imminent threat of a minimum and living wage increase coming next April following the new government Budget, which could also apply new inflationary pressure to the bottom line.
As such, investors need to carefully consider whether Tesco’s share price can maintain its momentum in light of these emerging threats.
This post was originally published on Motley Fool
