Tesco (LSE:TSCO) shares have been on a bit of a rampage in 2025. While the retail stock did take a bit of a tumble following the threat of a new pricing war, shares have since bounced back. And subsequently, across the last 12 months, shareholders have enjoyed a 27% return before counting the extra gains from dividends.
But even with all this impressive growth under its belt, could the supermarket giant have more hidden up its sleeve? And if so, how much money could an investor make if they were to buy 500 shares right now?
Latest share price forecasts
For the most part, the rise of Tesco shares in 2025 has been a continuation of the upward trend seen throughout the last five years. Management’s been leveraging its scale, Clubcard membership perks, and premiumisation to steal market share from both discount and upmarket retailers.
Combining this revamped growth strategy with operational simplification and cost-cutting efforts, profitability’s also been on the rise. And with earnings now growing at a faster pace compared to many of its closest rivals, the sentiment from institutional analysts has turned quite bullish.
As of 29 July, 16 analysts are tracking Tesco, 13 of which either rate the stock as Buy or Outperform. And even after delivering market-beating returns across the first half of the year, financial institutions expect further gains on the horizon. For example, Deutsche Bank‘s placed a price target for Tesco shares at 470p.
Let’s assume, Deutsche’s forecast is accurate. Compared to where the stock’s trading today, that indicates a potential 12% gain could be unlocked over the next 12 months. That means if an investor were to buy 500 Tesco shares today for around £2,115, the potential profit in August next year would be roughly £235.
Reviewing expectations
Deutsche’s projection’s driven by an expectation that Tesco will continue finding new ways to improve efficiency as well as take market share from its competitors. Yet sadly, there’s no way to guarantee that will actually happen. Even more so, now that other retailers are taking steps to try and take back the market share Tesco stole.
This is a risk that the analyst team at Jefferies has raised. The primary concern is that as the UK cost of living continues to climb, the popularity of and pressure from discount retailers like Aldi and Lidl could trigger a pricing war.
At the same time, the increase in the UK Minimum Wage and employer National Insurance contributions could also undo recent margin gains, slowing earnings growth as well. That’s why Jefferies has placed its Tesco share price target at only 350p, which translates into a 17% decline (a £365 loss) for investors with 500 shares in their portfolio.
The bottom line
Overall, investor sentiment surrounding this business is strong. And even with the threat of a pricing war on the horizon, Tesco seems to have more than enough financial resources to outlast its rivals.
Obviously, there are never any guarantees when it comes to investing, especially in the short term. But for those comfortable with potential price volatility, Tesco shares may be worth mulling over.
