Woolworths’ first-half numbers were solid, observes UBS, with earnings circa 3% ahead and strong cash-flow.
Even while expecting group sales to decline in the next 12 months, UBS sees a supportive backdrop with easing covid, resilient demand driven by changing online sales.
The broker also sees potential for a $1bn off-market buyback post the Endeavour de-merger. In UBS’s view, Woolworths is well placed to exit the pandemic stronger with higher share, richer data and an opportunity to expand its share of customer wallets in the long term.
The Buy rating is unchanged with a target price of $44.
Sector: Food & Staples Retailing.
Target price is $44.00.Current Price is $39.50. Difference: $4.50 – (brackets indicate current price is over target). If WOW meets the UBS target it will return approximately 10% (excluding dividends, fees and charges – negative figures indicate an expected loss).
