Supermarket giant and one of Australia’s largest employers Woolworths has underpaid nearly 6,000 of its employees close to $300 million dollars due to non-compliance with the industry award over the past decade.
Signs of investor worries about the first quarter trading performance of our two biggest retailers - Woolworths and Coles which are both due to update the market this week on how they went in the three months to the end of September.
Credit Suisse considers the stock expensive relative to valuation, which drives an Underperform rating. A lack of operating leverage in the FY19 result and cost headwinds appear to be incrementally negative, and the result was marginally below forecasts.
German competitor Kaufland is looking to start a battle for its share of the Australian households' wallet and Citi thinks this will act as a catalyst for a resumption of an industry-wide private label price war.
Morgan Stanley continues to believe the valuation is too rich, given the earnings growth outlook. The broker adjusts its numbers to allow for the buyback and the petrol divestment and lifts FY20 estimates for earnings per share by 5%. Target is raised to $26 from $23.