Tesco launches second buyback tranche, shares in focus after Q1 update

By Christina Vogel, Background & Management desk. Reviewed prior to publication on 2026-06-23, 14:22.

Tesco (GB00BLGZ9862) is moving ahead with its capital return plans. The UK supermarket group, whose shares trade on the London Stock Exchange under the ticker TSCO, has kicked off the second tranche of its GBP 750 million share buyback program as highlighted in recent market reports. MarketScreener summarized the new tranche on June 23, 2026.

Second tranche of GBP 750 million buyback

According to recent coverage from London, Tesco has started the second tranche of a previously announced GBP 750 million share repurchase, part of a broader GBP 1.45 billion buyback commitment running through April 2026. Tesco’s preliminary 2024/25 results on April 10, 2025, detailed the total buyback size and timetable. The latest tranche continues the program funded primarily from free cash flow and the sale of the banking operations.

In its April 2025 preliminary results, Tesco set out that GBP 750 million of the buyback would be funded from ongoing free cash flow and GBP 700 million from proceeds of the disposal of Tesco Bank, aiming to complete the program by April 2026. Price data from Hargreaves Lansdown show a market capitalization of around GBP 28 billion, providing context for the size of the repurchase relative to Tesco’s equity value.

Analysts react to Q1 and capital returns

The renewed buyback momentum follows Tesco’s recent first-quarter 2025/26 trading update, after which Bernstein adjusted its estimates for the retailer. Market reports note that Bernstein reacted to the Q1 numbers by tweaking profit forecasts, reflecting both resilient UK grocery demand and the impact of continued cash returns. MarketScreener lists an average analyst target price around 4.49 pounds for Tesco, indicating moderate potential upside versus recent trading levels.

Beyond Bernstein, various houses track Tesco against UK peers such as Sainsbury’s and Marks & Spencer, focusing on factors like grocery inflation, volume trends and loyalty scheme dynamics. Recent UK retail sales data from the Office for National Statistics showed a 1.2 percent rise in May 2026, which commentators say underpins a relatively robust environment for food retailers selling essential goods.

How Tesco earns its money

Tesco generates most of its revenue from grocery retailing through its extensive network of UK supermarkets, convenience stores and online operations. The group also operates wholesale and central European businesses and offers fuel stations alongside many larger stores, adding additional revenue streams beyond core food sales.

Where the Tesco shares trade today

The Tesco shares (GB00BLGZ9862) trade on the London Stock Exchange under the ticker TSCO and recently changed hands at around 4.42 pounds, based on late-morning prices on 2026-06-23.

This article is for informational purposes only and does not constitute investment advice, a recommendation to buy or sell securities, or any other form of financial advice. Investors should conduct their own research and consider their individual financial situation and risk tolerance before making investment decisions.