Tesco PLC (LON: TSCO) Stock Near 52‑Week Highs: Buyback, Dividend Outlook and 2026 Forecasts as of 4 December 2025

Tesco PLC’s share price has spent most of late 2025 loitering near 52‑week highs, powered by upgraded profit guidance, a sizeable £1.45bn share buyback and steadily rising dividends. As of the morning of 4 December 2025, Tesco shares are trading in the low‑450p range after closing at 450.9p in the previous session, leaving the stock up more than 20% year to date and comfortably ahead of the FTSE 100. ^[1]

At the same time, UK grocery inflation is cooling, promotions are intensifying and competitors are desperate for market share — exactly the sort of environment where Tesco’s scale is both a weapon and a risk. Here’s how the story looks today for investors watching Tesco PLC stock on 4 December 2025.

Tesco share price on 4 December 2025: still in the low‑450p range

Multiple real‑time feeds put Tesco’s share price in a tight band around the prior close this morning:

Tesco’s own investor site shows a last close of 450.9p, down 1.3% on 3 December. ^[2]
Live price snapshots from third‑party data providers show intraday trades around 451–453p on 4 December, broadly flat to modestly higher versus yesterday’s close. ^[3]

According to price history data, Tesco ended January 2025 at roughly 372p and December 2025 (so far) around 451p, meaning the shares have gained just over 20% this year and have more than doubled in the last three years. ^[4]

That rally has left Tesco trading:

On a trailing P/E around 19–20x,
On a forward P/E in the mid‑teens,
With a dividend yield a little above 3% at current prices. ^[5]

From profit warning to upgraded guidance in one year

2025 has been a narrative arc in two acts.

Act I: April profit warning and price‑war fears

Back in April 2025, Tesco spooked the market by warning that adjusted operating profit for the year ending February 2026 would fall to £2.7–3.0bn, down from £3.13bn in 2024/25 and below prior expectations. The company explicitly cited intensifying price competition — particularly from Asda — and rising labour and tax‑related costs running into hundreds of millions of pounds. The shares dropped more than 7% on the day of the warning. ^[6]

At the same time, Tesco announced a £1.45bn share buyback to be completed by April 2026, effectively telling investors that management still believed the equity was undervalued despite the profit pressure. ^[7]

Act II: October upgrade after strong first half

Fast‑forward to October 2025 and the tone had shifted. Interim 2025/26 results showed:

Sales growth of about 5% in the first half,
Adjusted operating profit of £1.67bn, ahead of analyst expectations around £1.57bn,
Continued market share gains in the UK core business. ^[8]

On the back of that performance, Tesco raised its full‑year 2025/26 guidance to £2.9–3.1bn of adjusted operating profit, up from the April range of £2.7–3.0bn. ^[9]

The upgrade helped drive a sharp relief rally: Reuters reported that Tesco was the top gainer in the FTSE 100 on the day, adding more than 5% as investors reassessed the profit‑war narrative. ^[10]

Even so, the new guidance midpoint (about £3.0bn) is only roughly in line with last year’s £3.13bn result, reminding investors that Tesco’s strategy is less about explosive growth and more about defending a leading franchise while returning cash.

The £1.45bn buyback: nearly 5% of the company being retired

The buyback is arguably the single most important driver of Tesco’s share price in late 2025.

Key milestones:

April 2025: Tesco announces a £1.45bn share repurchase programme running to April 2026. ^[11]
By 28 November 2025: Regulatory filings show 306.9m shares bought back at an aggregate cost of £1,250.6m, reducing the share count to about 6.43bn. ^[12]
2 December 2025: Tesco purchases another 3.19m shares at an average price of 456.79p, taking the cumulative total to 313.97m shares cancelled for £1,282.8m and leaving 6,422,874,403 shares outstanding. ^[13]
3 December 2025: A further 3.44m shares are bought at an average 452.49p, with the company stating that the shares will again be cancelled. Subsequent disclosures indicate the share count falling to around 6.42bn. ^[14]

Tesco’s own summary of the programme confirms that, as of late November, roughly £1.25bn of the £1.45bn authorization had been deployed, with a third tranche of about £350m now underway. ^[15]

With a current market capitalisation around £29bn, a £1.45bn buyback equates to almost 5% of the company’s equity being retired — a buyback yield similar in magnitude to the dividend yield. ^[16]

For existing shareholders, that combination of dividends plus buybacks gives a total shareholder yield in the mid‑to‑high single digits, a figure echoed by independent analysis that pegs Tesco’s total yield (dividends plus buybacks) at about 7–8%. ^[17]

Market share momentum as UK grocery inflation cools

Underneath the share price, Tesco has quietly been extending its lead in UK grocery.

Industry data from Worldpanel by Numerator (formerly Kantar) shows Tesco’s UK grocery market share at 28.2% in the 12 weeks to 2 November 2025, up 0.5 percentage points year‑on‑year, with sales up 5.9% over the same period. ^[18]
The same dataset shows discounters Lidl and Aldi still growing rapidly, but rival Asda losing share, with its market share down to 11.6% and sales falling almost 4%. ^[19]
Earlier in October, separate analysis put Tesco’s share slightly higher at 28.3% over 12 weeks to 5 October, with sales up nearly 7%, again outpacing most major rivals except Lidl. ^[20]

At the macro level, UK grocery inflation has slowed to 4.7% in the four weeks to 2 November, down from 5.2% in the prior period, as supermarkets increase promotions and price cuts ahead of Christmas. ^[21]

Roughly 30% of grocery spending is now on promotions, according to Worldpanel, underscoring the promotional arms race. ^[22]

For Tesco, the combination of cooling inflation + rising promotions + rising market share points to two simultaneous truths:

The company’s value proposition (Clubcard prices, price‑matching, private‑label ranges) is resonating with customers.
Maintaining that lead likely requires continued investment in price and promotions, which can cap margin expansion.

Analyst sentiment: generally positive, with a few sceptics

Despite the earlier profit warning, the analyst community is broadly constructive on Tesco as of early December.

Price targets and ratings

Investing.com aggregates views from 12 analysts and shows:
- Average 12‑month target price: ~470p,
- High/low range:510p (bull case) to 422p (bear case),
- Consensus rating:“Buy” (10 Buys, 2 Holds, 1 Sell),
- Implied upside of around 3–4% from current levels. ^[23]
MarketBeat lists a slightly lower consensus target around 461p for the London‑listed shares, again with an overall Buy rating and notes that Tesco hit a 52‑week high of about 480.9p in mid‑November. ^[24]
For the US‑traded ADR (TSCDY), MarketBeat describes sentiment as a “Moderate Buy”, with Barclays reiterating an “overweight” stance while Zacks recently trimmed its rating from “strong‑buy” to “hold”. ^[25]

Growth and valuation expectations

Equity‑research aggregation platforms paint a picture of low‑growth, high‑cash‑return stability:

Forecast earnings growth around 9–10% per year over the next few years,
Forecast revenue growth around 2–3% per year,
Expected return on equity in the mid‑teens (around 16–17%). ^[26]

These are respectable numbers for a mature grocer, but not the sort of hyper‑growth that would justify extreme multiples. With Tesco trading around 19–20x trailing earnings and mid‑teens forward earnings, analysts see the valuation as fair to mildly rich rather than obviously cheap. ^[27]

Not everyone is bullish. MarketScreener notes that Morningstar downgraded Tesco to “Sell” in October, reflecting concerns about valuation and the risk that profit growth may disappoint if a prolonged price war materialises. ^[28]

Dividend outlook: modest yield, but growing

Tesco’s investment case has increasingly become about steady income + buybacks rather than capital growth alone.

Recent and forecast dividend details:

The interim dividend for 2025/26 was set at 4.8p per share, paid in November 2025, in line with Tesco’s policy of setting the interim at about 35% of the prior year’s full‑year dividend. ^[29]
Various analyst collations suggest total dividends per share around 14–14.5p in 2026, rising towards 16p in 2027 and 17p+ by 2028, implying a forward dividend yield in the 3–3.5% range at current prices. ^[30]
Independent data providers currently peg Tesco’s trailing dividend yield around 3.1–3.2%, with a “future” yield forecast closer to 3.5–3.8% as payouts grow. ^[31]

Importantly, Tesco passes most of the standard dividend‑safety checks: cover of roughly 2–2.5x earnings, a history of not cutting the dividend in recent years, and mid‑single‑digit dividend growth. ^[32]

Pair that with a roughly 5% buyback yield, and long‑term shareholders are effectively being handed high‑single‑digit cash returns each year before any underlying business growth is considered. ^[33]

Festive trading, Clubcard changes and promotional intensity

As of 4 December 2025, Tesco is deep into its Christmas offensive.

Recent operational headlines include:

Clubcard changes for December: UK consumer outlets report that Tesco is temporarily doubling Clubcard points on certain categories (such as gift cards and selected partners) throughout December, with some estimates suggesting heavy users could generate over £500 in extra value before Christmas. ^[34]
Aggressive seasonal promotions: Tesco is selling retro 750g Quality Street tins at £7.50 for Clubcard holders, down from £12, essentially pricing the tins at the same level as smaller plastic tubs to emphasise value. ^[35]
Festive “money‑saving” campaigns: Company press releases highlight discounted Christmas trees, toys and “Perfectly Imperfect” Christmas trees (including some being given away) as part of a broader push to demonstrate affordability and reduce waste. ^[36]

These initiatives support Tesco’s value‑for‑money narrative and likely help sustain the market‑share gains discussed earlier. They also reinforce why investors should not expect margins to expand dramatically while the cost‑of‑living squeeze and political pressure on food pricing remain in the foreground.

Key risks for Tesco shareholders

Even with the latest guidance upgrade and strong share‑price performance, Tesco is not risk‑free. Some of the main pressure points:

Price war and margin compression
April’s profit warning made clear that Tesco is willing to sacrifice near‑term margin to hold share if competitors, especially Asda and the discounters, push harder on price. The subsequent guidance upgrade doesn’t eliminate that risk; it just shows management navigating it more successfully than feared. ^[37]
Promotional intensity and trading down
With almost 30% of grocery spend on promotions and inflation still higher than pre‑pandemic norms, shoppers remain highly price‑sensitive. If consumers trade down to cheaper ranges faster than Tesco can lower its cost base, operating leverage can work in reverse. ^[38]
Regulation and labour costs
Higher minimum wages, national insurance increases and political scrutiny of supermarket profits collectively increase Tesco’s cost base by hundreds of millions of pounds per year, according to earlier profit‑warning commentary. ^[39]
Execution on digital and retail media
Tesco is investing heavily in its online marketplace and retail media businesses, which could become meaningful profit drivers but also carry execution risk if customer experience or data usage missteps provoke pushback. ^[40]
Valuation risk after a strong run
With the shares trading near 52‑week highs and on a richer multiple than several global food retailers, any disappointment in 2025/26 earnings, buyback pace or dividend growth could trigger a sharp derating.

Tesco PLC stock: the big picture for 2026

As of 4 December 2025, the Tesco PLC investment story looks like this:

Business performance: Market‑share gains in UK grocery, resilient like‑for‑like sales growth and upgraded guidance to £2.9–3.1bn of adjusted operating profit for 2025/26. ^[41]
Balance sheet & cash returns: Healthy cash generation funding a £1.45bn buyback and a growing dividend, together offering a total yield in the high single digits. ^[42]
Valuation: Roughly mid‑teens forward P/E with modest upside to most analysts’ target prices, implying that a lot of good news is already in the price. ^[43]
Outlook: Consensus expects low‑single‑digit revenue growth but high‑single‑digit earnings growth, driven by mix, efficiency and buybacks rather than volume boom. ^[44]

For investors scanning opportunities in UK defensive stocks, Tesco today looks like a cash‑return machine with solid but unspectacular growth prospects, operating in a sector where scale and data are genuine competitive advantages — and where the main strategic question for 2026 is whether it can keep winning the market‑share battle without reigniting the profit‑warning narrative that began this year.