Fact based stock research
Tesco (LSE:TSCO)

GB00BLGZ9862

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

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Tesco stock research in summary

tescoplc.com


ANALYSIS: With an Obermatt Combined Rank of 41 (worse than 59% compared with investment alternatives), Tesco (Food Retail, United Kingdom) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Tesco are a good value (attractively priced) with a consolidated Value Rank of 84 (better than 84% of alternatives) but show below-average growth (Growth Rank of 27), and are riskily financed (Safety Rank of 28), which means above-average debt burdens. ...read more


RECOMMENDATION: A Combined Rank of 41, is a hold recommendation based on Tesco's financial characteristics. As the company Tesco's key financial metrics exhibit good value (Obermatt Value Rank of 84) but low growth (Obermatt Growth Rank of 27) and risky financing practices (Obermatt Safety Rank of 28), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 84% of comparable companies, may indicate the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more


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Country United Kingdom
Industry Food Retail
Index FTSE All Shares, FTSE 100, FTSE 350, Dividends Europe, Employee Focus EU, Human Rights, Low Waste, Renewables Users
Size class XX-Large

This stock has achievements: Top 10 Stock.

14-Mar-2024. Stock data may be delayed. Log in or sign up to get the most recent research.




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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Tesco

RESEARCH HISTORY 2021 2022 2023 2024
VALUE
VALUE
GROWTH
GROWTH
SAFETY
SAFETY
SENTIMENT
SENTIMENT
360° VIEW
360° VIEW

Most recent update of the stock research: 14-Mar-2024. Financial reporting date used for calculating ranks: 26-Aug-2023. Stock research history is based on the Obermatt Method. The higher the rank, the better Tesco is in the corresponding investment strategy.
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Combined financial peformance in Detail

ANALYSIS: With an Obermatt Combined Rank of 41 (worse than 59% compared with investment alternatives), Tesco (Food Retail, United Kingdom) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Tesco are a good value (attractively priced) with a consolidated Value Rank of 84 (better than 84% of alternatives) but show below-average growth (Growth Rank of 27), and are riskily financed (Safety Rank of 28), which means above-average debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 41, is a hold recommendation based on Tesco's financial characteristics. As the company Tesco's key financial metrics exhibit good value (Obermatt Value Rank of 84) but low growth (Obermatt Growth Rank of 27) and risky financing practices (Obermatt Safety Rank of 28), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 84% of comparable companies, may indicate the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

RESEARCH HISTORY 2021 2022 2023 2024
VALUE
VALUE
GROWTH
GROWTH
SAFETY
SAFETY
COMBINED
COMBINED

Last update of combined financial performance: 14-Mar-2024. Stock analysis on combined financial performance: The higher the rank of Tesco the better the performance.


Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 84 (better than 84% compared with alternatives) for 2024, Tesco shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators above average for Tesco. Price-to-Sales (P/S) is 59, which means that the stock price compared with what market professionals expect for future sales is lower than for 59% of comparable companies, indicating a good value concerning Tesco's revenue size. The same is valid for expected Price-to-Profits (or Price / Earnings, P/E), more favorable than for 59% of alternatives. It is also positive for expected dividend yields with a Dividend Yield rank of 86 (dividends are expected to be higher than 86% of other stocks). But, compared with other companies in the same industry, the Price-to-Book Capital ratio (also referred to as market-to-book ratio) is higher than average, making the stock more expensive. Only 55% of all competitors have an even higher price compared with book capital which puts the Price-to-Capital Rank for Tesco to 45. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 84, is a buy recommendation based on Tesco's stock price compared with the company's operational size and dividend yields. A low level of book capital means that the company has a business that is leaner in assets than its competitors. For instance, the company could be leasing its production facilities or be more focussed on intellectual property, such as its brand and software, which is less visible in its book capital. If that is the case, the three good value ranks for Sales, Profits, and Dividends are reliable indicators for the stock price value. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision. ...read more


VALUE METRICS 2021 2022 2023 2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)
DIVIDEND YIELD
DIVIDEND YIELD
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE

Last update of Value Rank: 14-Mar-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Tesco; except for dividend yield where the rank is higher, the higher the yield.


Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 27 (better than 27% compared with alternatives), Tesco shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with three out of four indicators below average for Tesco. Sales Growth has a below market rank of 21, which means that, currently, professionals expect the company to grow less than 79% of its competitors. The same is valid for Capital Growth, with a rank of 22, and Profit Growth, with a rank of 49. Currently, professionals expect the company to grow its profits less than 51% of its competitors). Only shareholders are optimistic. Stock Returns are above average at a rank of 68, which means that the stock returns have recently been above 68% of alternative investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 27, is a hold recommendation for growth and momentum investors. That picture may be the result for a company that has reached the bottom. All went south for Tesco, and it still looks bad, but some investors already see light at the end of the tunnel, rewarding the stock with recent above-market stock returns. It could also mean that investors are correcting an overreaction to negative news. If that were the case, the positive stock returns are not yet a sign of recovery. Investors should look closely at the Value and Sentiment indicators before they make a stock purchasing decision, because growth is unlikely to be the driving argument behind this investment. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is low here. ...read more

GROWTH METRICS 2021 2022 2023 2024
REVENUE GROWTH
REVENUE GROWTH
PROFIT GROWTH
PROFIT GROWTH
CAPITAL GROWTH
CAPITAL GROWTH
STOCK RETURNS
STOCK RETURNS
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH

Last update of Growth Rank: 14-Mar-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Tesco.


Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 28 (better than 28% compared with alternatives), the company Tesco has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of Tesco is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Tesco. Liquidity is at 63, meaning the company generates more profit to service its debt than 63% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 12, which means that the portion of the debt that is about to be refinanced is above average. It has more debt in the refinancing stage than 88% of its competitors. Leverage is also high at a rank of 31, which means that the company has an above-average debt-to-equity ratio. It has more debt than 69% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 28 (worse than 72% compared with alternatives), Tesco has a financing structure that is riskier than that of its competitors. High Leverage (a low Obermatt Leverage Rank) is good in good times, because it usually indicates that shareholders get higher returns. The good Liquidity performance of the company is an indicator that this is the case. However, if you expect an economic downturn, you may stay clear of this stock because they have an above-average debt level that needs refinancing soon. If the company is sailing with good winds, as may be visible from the Growth and Sentiment performance, the refinancing risk may be lower than the low Refinancing rank suggests. ...read more

SAFETY METRICS 2021 2022 2023 2024
LEVERAGE
LEVERAGE
REFINANCING
REFINANCING
LIQUIDITY
LIQUIDITY
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY

Last update of Safety Rank: 14-Mar-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Tesco and the more cash is available to service its debt.


Sentiment Metrics in Detail

SENTIMENT 2021 2022 2023 2024
ANALYST OPINIONS
ANALYST OPINIONS
OPINIONS CHANGE
OPINIONS CHANGE
PRO HOLDINGS
PRO HOLDINGS
MARKET PULSE
MARKET PULSE
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT

Last update of Sentiment Rank: 14-Mar-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Tesco.
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Stock analysis by the purely fact based Obermatt Method for Tesco from March 14, 2024.

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