Tesco: New LTIP - EPS/FCF targets provide confidence and market share added

Research evidence excerpt

Tesco: New LTIP - EPS/FCF targets provide confidence and market share added

Equity Research

European Food Retail

15 May 2026

Tesco

New LTIP - EPS/FCF targets provide

confidence and market share First Look

TSCO.L/TSCO LN OVERWEIGHTadded

European Food Retail NEUTRAL

Comfort taken from the new LTIP targets for 28/29 disclosed Price Target GBP 5.15

in the Annual Report: 1) Market share added as a measure; 2) Price (14-May-26) GBP 4.51

Barc and cons at mid-point of EPS range; 3) On FCF, Barc in PotentialSource: Bloomberg,Upside/DownsideBarclays Research +14.3%

upper half and (limited) cons just above stretch, but Tesco

European Food Retailhistorically delivers at or above the top end. OW.

Matthew Clements

+44 (0)20 7773 6018

Tesco yesterday published its 25/26 Annual Report. Most numbers were disclosed back in April matthew.clements@barclays.com

with the FY numbers, but the annual report does disclose the new set of LTIP targets for the Barclays, UK

coming three-year period. Viktoria Petrova

+49 (0)69 7161 1052

The three key takeaways are: viktoria.petrova@barclays.com

1. Market share has been introduced as an incentive measure with a 10% weighting - BBI, Frankfurt

naturally with no specific target disclosed until the end of the performance period. This is an

Imogen Doyle

encouraging addition as Tesco looks to build on its recent market share gains that have +44 (0)20 7773 2605

taken it to its highest UK market share in a decade. The remuneration committee concluded imogen.doyle@barclays.com

that the addition of the measure would make the LTIP more aligned to Tesco's strategy of Barclays, UK

driving long-term growth in core operations (i.e. grocery) and emerging revenue streams.

Tesco told suppliers in May 2025 it aims to capture >30% market share (vs 28.5% in 12 w/e 22