Tesco Shares Maintain Upward Trajectory on Strong Financial Performance

Tesco continues to demonstrate impressive financial strength, with its stock reaching new heights following the release of better-than-expected first-half results. The retail giant's robust operational performance and enhanced shareholder returns are driving sustained investor confidence.

The British retailer reported substantial growth across key financial metrics for the first half of 2025/26. Revenue climbed 5.1 percent to reach £33.05 billion, while adjusted operating profit advanced to £1.67 billion. Perhaps most notably for investors, the interim dividend saw a significant 12.9 percent increase to 4.80 pence per share.

Building on this momentum, Tesco has raised its full-year guidance, now projecting adjusted operating profit between £2.9 billion and £3.1 billion. This upgraded forecast suggests management expects the positive trends to continue throughout the second half of the financial year.

Capital Return Strategy Gains Momentum

Tesco's financial stability remains solid despite a moderate increase in net debt to £9.884 billion. The company generated substantial free cash flow of £1.298 billion, providing a strong foundation for its aggressive capital return program.

Should investors sell immediately? Or is it worth buying Tesco?

The current share repurchase initiative demonstrates this commitment:
* £891 million worth of shares already repurchased
* Total program of £1.45 billion currently underway
* Consistent cash generation supporting ongoing capital returns to shareholders

Market Position and Technical Outlook Strengthen

From a technical perspective, Tesco's stock appears bullish, trading around 454 pence and maintaining a position well above its 200-day moving average of 412 pence. The company continues to strengthen its competitive position in the UK market, expanding its market share to 28.4 percent – an increase of 77 basis points.

Market analysts reflect this positive sentiment, with a consensus price target of 461 pence and predominantly buy recommendations. The combination of operational excellence and attractive shareholder returns positions Tesco as a dominant force within the retail sector.