The broker has reviewed its benchmark basket of grocery prices at Woolworths and Coles ((WES)) and found that Woolies is yet to invest heavily in price competition. The supermarket appears to be rapidly losing share in the grocery market despite promotional activity picking up.
It’s still early days, the broker acknowledges, but thus also too soon for investors to be confident the new management team can succeed given there isn’t one yet, and when there is, a new strategy will need to be developed. Underperform and $27.24 target retained.
Sector: Food & Staples Retailing.
Target price is $27.24.Current Price is $27.14. Difference: $0.10 – (brackets indicate current price is over target). If WOW meets the Macquarie target it will return approximately 0% (excluding dividends, fees and charges – negative figures indicate an expected loss).