Tesco (AO) | Hold | Exploring disposal of its Central European operations?

Research evidence excerpt

Tesco (AO) | Hold | Exploring disposal of its Central European operations?

News comment

Release date: 09 July 2026

François Digard

Head of French Equity Research, Food retail & TIC analyst

+33 1 70 81 57 47

fdigard@keplercheuvreux.com

HoldTesco

United Kingdom | Food retail Beta Profile: MCap: GBP29.4bn

Target Price: 495p Bloomberg: TSCO LN Reuters: TSCO.L

Current Price: 472.20p Free float 98%

Up/downside: 4.8% Avg. daily volume (GBPm) 10,275.5

YTD abs performance 6.9% Market data: 08 July 2026

52-week high/low (GBP) 501.20/401.10

Exploring disposal of its Central European operations?

According to the Financial Times, Tesco is exploring a potential sale of its operations in Hungary, the Czech Republic and Slovakia.

Potential exit from Central Europe would complete Tesco’s strategic refocus.

Financial exposure is limited, but proceeds could be material.

We would view a disposal positively, as it would simplify the equity story and further concentrate Tesco on its most profitable and

defensible markets, the UK and Ireland. The most likely use of proceeds, in our view, would be incremental shareholder returns,

consistent with Tesco’s capital allocation framework and its track record of returning surplus cash through buybacks. This does

not change our broader cautious stance on valuation: the operational impact would be limited, while the investment case

remains mainly driven by UK market share, price competition and margin resilience.

Financial Times article reports a potential disposal

These businesses employ more than 22,000 people and represent Tesco’s last sizeable international platform outside the UK and

Ireland. Tesco has not confirmed the report, stating that it does not comment on rumour or speculation.