Citi upgrades to Buy from Neutral, raising estimates for earnings per share by 5% for FY21 and 3.5% for FY22. This reflects a rational grocery market and earnings momentum as well as appealing relative valuations.
The broker assesses the sales gap over Coles ((COL)) is driven by the online channel and forecasts like-for-like sales growth of 11.6% in the first quarter for Woolworths. Target is raised to $44.50 from $41.20.
Sector: Food & Staples Retailing.
Target price is $44.50.Current Price is $39.04. Difference: $5.46 – (brackets indicate current price is over target). If WOW meets the Citi target it will return approximately 12% (excluding dividends, fees and charges – negative figures indicate an expected loss).