RBC Ups Forecasts for Tesco After 'Solid' Fiscal H1 Results

02:53 AM EDT, 10/13/2026 (MT Newswires) -- RBC Capital Markets raised its estimates for Tesco (TSCO.L) to reflect the London-listed supermarket group's stronger-than-expected fiscal first-half performance and increased share buyback outlook. "Tesco reported a solid H1 set of results last week which we think was a little better than Tesco was expecting when it set guidance back in April. Even so, Tesco has maintained its conservatism, and we note that the top end of guidance implies just over 2.5% yoy operating profit growth in H2 versus the 6.5% yoy that Tesco has delivered in H1. Cash generation in the business remains very good and Tesco has added a further GBP200mn to its buyback for this year (next year's buyback will be set at year-end)," according to a Monday note focused on the European retailing industry. As such, the research firm lifted its total sales outlook and underlying profit before tax forecasts for fiscal 2027 through 2029 by 1% to 2%, while EPS estimates for the same period were raised by 2% to 5% on increased share repurchase expectations. Analysts also lifted their price target on the stock to 5.10 pounds sterling from 4.85 pounds, with a sector perform rating. "We view Tesco as a best-in-class player in the Food Retail space, with a strong business model and an experienced management team. The business has executed well, which has led to strong market share gains in recent years. We are mindful that market share gains have moderated in recent periods, and we expect this trend to continue given competitors in the UK are starting to stabilize their volume losses. We note that food inflation, which has been coming down from the highs, is likely to see some upward pressure in 2027, given recent higher oil prices," RBC said.