Morgans assesses Woolworths Group’s trading update was disappointing after significantly higher covid costs far outweighed slightly-better than-expected Australian Food sales growth in the 1H22. The target price slips to $36.65 from $37.85 and the Hold rating is unchanged.
The analyst keeps FY23 and FY24 earnings forecasts broadly unchanged after assuming a reversion to more normal trading conditions. The long-term fundamentals of the business are considered to remain sound.
Sector: Food & Staples Retailing.
Target price is $36.65.Current Price is $37.45. Difference: ($0.80) – (brackets indicate current price is over target). If WOW meets the Morgans target it will return approximately -2% (excluding dividends, fees and charges – negative figures indicate an expected loss).
