RBC Updates Tesco Forecasts Amid Planned Czech Republic, Slovakia Disposals

12:17 PM EST, 11/09/2026 (MT Newswires) -- RBC Capital Markets made changes to its forecasts for Tesco (TSCO.L) to account for the British retail giant's planned sale of its businesses in the Czech Republic and Slovakia to Dutch food retail group Koninklijke Ahold Delhaize (AD.AS). "The total consideration for the sale represents a total enterprise value of GBP1.5bn (EUR1.7bn) on a cash and debt free basis. Tesco is expecting cash proceeds of GBP1.0bn (EUR1.2bn) before tax and other transaction costs, which we expect to be fairly small," the research firm said in a European Retailing report published Monday. "We note that the businesses have been operated fairly independently from the UK&I operation and so we expect separation should not be too complicated. Completion is expected for the second half of 2027." With this in mind, RBC lowered its pretax profit assumptions for fiscal years 2028 and 2029 by between 1% and 3%, alongside lower revenue and EBITDA estimates. EPS projections, meanwhile, remain unchanged, given Tesco's intention to give the cash proceeds back to shareholders via an augmented share buyback. "Tesco has delivered very good cash generation in recent years, which we expect to continue, albeit we do note a step-up in capex, driven by automation and other projects. These should support lower labour costs in time. We expect solid cash generation combined with a strong balance sheet should allow Tesco to continue its recent trend of additional cash returns," analysts added. RBC rates Tesco's stock at sector perform, with a price target of 5.10 pounds sterling.