Tesco stock: fair value
TCO0.DEThe fair value of Tesco under our model is $9.74, the price is 25% below.
The fair value is an estimate from our model, not a price target.
Daily figure as of 13 Nov 2026
Valuation signal
Significantly undervaluedIn our model the price counts as cheap below $7.49 and expensive above $13.91 (uncertainty medium, based on the price swings of the past year).
The two parts of the fair value come to $11.62 (cash-flow model) and $7.85 (industry comparison), and the gap between them shows how uncertain the estimate is. The price is below both.
Calculated with a cost of equity of 8.8%. At 9.8% the fair value would be $8.77, at 7.8% it would be $11.18.
Where the number comes from
Half from the cash-flow model, half from earnings times the industry P/E (19.7).
Ten-year cash-flow model from smoothed free cash flow and its past growth until it reaches 3.8%. Discounted at 8.8% (floor: government bond yield 3.8% plus 5 percentage points, since beta 0.8 times the risk premium would give less); no analyst estimates were available.
Calculate with your own assumptionsThe calculation step by step
With these figures the cash flow model arrives at $11.62 per share: free cash flow for the next ten years, each year discounted to today at 8.8%, plus the terminal value for the years after. The table explains the calculation; it is not a recommendation.
Calculation as a table
| Year | Free cash flow | Source | Discount factor | Present value (discounted at 8.8%) |
|---|---|---|---|---|
| 2027 | $3.9B | extrapolated at 0.9% | 0.9189 | $3.58B |
| 2028 | $3.97B | extrapolated at 1.8% | 0.8445 | $3.35B |
| 2029 | $4.06B | extrapolated at 2.4% | 0.7760 | $3.15B |
| 2030 | $4.18B | extrapolated at 2.8% | 0.7131 | $2.98B |
| 2031 | $4.31B | extrapolated at 3.1% | 0.6553 | $2.82B |
| 2032 | $4.45B | extrapolated at 3.3% | 0.6022 | $2.68B |
| 2033 | $4.61B | extrapolated at 3.5% | 0.5534 | $2.55B |
| 2034 | $4.77B | extrapolated at 3.6% | 0.5085 | $2.43B |
| 2035 | $4.95B | extrapolated at 3.7% | 0.4673 | $2.31B |
| 2036 | $5.13B | extrapolated at 3.7% | 0.4295 | $2.2B |
| Step | Value |
|---|---|
| Sum of present values (ten years) | $28.06B |
| Terminal value: cash flow 2036 × (1 + 3.8%) / (8.8% − 3.8%) | $106.51B |
| Present value of terminal value (× 0.4295) | $45.74B |
| Equity value (sum plus present value of terminal value) | $73.8B |
| Shares (diluted) | 6.35B |
| Value per share (equity value divided by shares) | $11.62 |
| Earnings per share, last twelve months | $0.40 |
| × 19.7 (industry P/E) | $7.85 |
| Fair value (average of both parts) | $9.74 |
The model uses free cash flow after interest, which belongs to shareholders, discounted at the cost of equity. Net debt is therefore not deducted again.
Data status and sources
- Score
- Daily value of 13 Nov 2026, recalculated nightly
- Price
- Closing price of 12 Nov 2026
- Latest annual report
- Fiscal year 2026, period end 28 Feb 2026
- Currency
- Amounts in US dollars, converted at the ECB reference rate of 12 Nov 2026 ($1 = €0.9024, $1 = £0.7544)
- Source
- Financial statements, ratios and prices from Financial Modeling Prep (FMP), based on the company's reports. MEQIRI calculates the score and fair value from them.
Mandatory disclosures for this rating
- ; time horizon around 12 months
- Rated Neutral, published since 7 Nov 2026 (in the score history since 30 Nov 2023)
- Valuation signal Undervalued since 7 Nov 2026, previously Fairly valued
- End-of-day prices, metrics cached for up to 24 hours
- Score and fair value are estimates from a disclosed model. They are not facts and not a price target.
- Produced by SSM Ventures UG (haftungsbeschränkt), responsible person Sven Brostmeyer, Managing Director, automatically according to the disclosed model.
- Not investment advice. Losses up to and including a total loss are possible. Personal circumstances are not considered.