Published on 1 Apr 2024 on Simply Wall St. via Yahoo Finance
An Intrinsic Calculation For Tesco PLC (LON:TSCO) Suggests It's 38% Undervalued
Key Insights
The projected fair value for Tesco is UK£4.76 based on 2 Stage Free Cash Flow to EquityTesco's UK£2.97 share price signals that it might be 38% undervaluedOur fair value estimate is 45% higher than Tesco's analyst price target of UK£3.29
Today we'll do a simple run through of a valuation method used to estimate the attractiveness of Tesco PLC (LON:TSCO) as an investment opportunity by taking the forecast future cash flows of the company and discounting them back to today's value. This will be done using the Discounted Cash Flow (DCF) model. There's really not all that much to it, even though it might appear quite complex.