Shore Capital stays at 'hold' on Tesco following H1 earnings.
Shore Capital said on Thursday that Tesco had delivered a resilient first‑half performance in a UK grocery market that tightened over the summer, with the grocery chain posting 1.6% constant‑currency sales growth and a 6.3% rise in adjusted underlying earnings.
Tesco
08 October 2026 15:09:18
Source: Sharecast
The broker, which has a 480p target price on the stock, noted Tesco had been more active on promotions than expected earlier in the year but continued to show strong cash discipline, supporting a 5.2% increase in the interim dividend and an expanded £950m buyback.
While Shore welcomed Tesco's decision to lift the lower end of FY27 guidance to £3.15bn to £3.30bn, it cautioned that festive trading was likely to be highly competitive and reiterated its 'hold' rating.
Tesco reported group sales of £33.8bn, excluding VAT and fuel, with adjusted underlying earnings rising to around £1.78bn. Free cash flow increased 21% year‑on‑year to £1.57bn, helped by a £250m timing benefit, while net debt stood at £10bn, modestly higher year‑on‑year but below the FY26 year‑end level. Adjusted earnings per share rose 12.2% to 17.3p.
The FTSE 100-listed firm also maintained guidance for £1.5bn to £2bn free cash flow and now expects capital expenditure of around £1.7bn, up £100m. Shore kept its FY27 trading‑profit estimate at £3.22bn and left pre-tax profit and earnings per share forecasts unchanged.
Halifax is not responsible for the content and accuracy of the Markets News articles. We may not share the views of the author. Understand the risks, please remember the value of your investment can go down as well as up and you may not get back the full amount you invest. We don't provide advice so if you are in any doubt about buying and selling shares or making your own investment decisions we recommend you seek advice from a suitably qualified Financial Advisor. Past performance is not a guide to future performance.
