Tesco a 'high-quality compounder' despite cautious outlook, says Deutsche Bank

Tesco PLC's (LSE:TSCO) conservative guidance for the year ahead understates the supermarket's true earnings potential and the shares remain a 'buy', Deutsche Bank argues, lifting its price target to 525p from 500p following last week's full-year results. Analyst Benjamin Yokyong-Zoega describes Tesco as a "high-quality multi-year compounder," pointing to an upgraded medium-term free cash flow outlook, a strong competitive position, and a track record of outperforming its own guidance as the foundations for continued confidence.