RE: Tesco26 May 2026 15:53
Fastfood,
Yes > Tesco can reach £8 by 2032, but I would call it a bull-case target, not a conservative base case.
At today’s quoted Tesco price of around 460p, an 800p share price would require roughly a 74% capital gain, or about 9–10% annual share-price growth, depending on where in 2032 you measure it. Tesco’s latest reported adjusted diluted EPS was 29.0p, and management has continued buybacks, including a completed £1.45bn programme and a further £750m buyback announced to April 2027.
The maths is the key.
For Tesco to justify 800p, you probably need one of these combinations:
2032 EPS P/E multiple Implied price
40p 20x 800p
44p 18x 792p
50p 16x 800p
So the cleanest route to £8 is not wild hype. It is something like:
29p EPS today → 40–44p EPS by 2032, plus a market multiple around 18–20x.
That means Tesco needs roughly 5.5%–7.5% annual EPS growth from here, depending on the valuation multiple. That is achievable, but not easy for a mature supermarket.
Several factors support the bull case: Tesco has a strong market share, reliable cash generation, a progressive dividend policy targeting about 50% of adjusted EPS, and ongoing buybacks that reduce the share count and support EPS growth.
The bear case is that Tesco is still a supermarket. Margins are not Rolls-Royce-style optionality. Food retail is competitive, Aldi/Lidl/Asda/Sainsbury’s pressure never disappears, wage and tax costs matter, and a defensive stock rarely keeps a premium rating forever unless earnings keep moving.
My view:
£6–£7 by 2032 feels like a sensible base-to-good outcome.
£8 is possible, but it needs continued EPS growth, buybacks, dividend discipline, stable margins, and no major valuation derating.
£8+ becomes much more realistic if Tesco compounds EPS towards 40p+ and the market still awards it an 18–20x rating.
Captain’s version: Tesco can sail to £8, but she needs steady wind, buybacks in the boiler room, and no price-war cannonballs through the hull.
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