WOW – Morgans rates as Hold

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Following the failure of the BP sale, Woolworths has entered a new alliance with Caltex ((CTX)) covering convenience, grocery, loyalty and fuel. The broker sees the deal as positive in lieu of the BP deal being blocked.

The broker has lifted its target to $27.38 from $25.87 and retains Hold, but given recent share price strength the broker suggests a trimming of positions ahead of further margin compression as supermarket competition heats up.

Sector: Food & Staples Retailing.

Target price is $27.38.Current Price is $30.60. Difference: ($3.22) – (brackets indicate current price is over target). If WOW meets the Morgans target it will return approximately -12% (excluding dividends, fees and charges – negative figures indicate an expected loss).

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