Woolworths Group Ltd
WOW: XASX (AUS)
Morningstar Rating for Stocks | Fair Value | Economic Moat | Capital Allocation |
---|---|---|---|
A$89.20 | Rvsblrv | Wbbhvmbn |
Woolworths Earnings: Sacrificing Recent Efficiency Gains Could Boost Market Share
We increase our fair value estimate on narrow-moat Woolworths by 2% to AUD 27.50 after revising our longer-term estimates. Higher maintainable operating margins in the Australian food segment and the time value of money both contribute but higher long-term capital expenditures detract. Fiscal 2023 underlying NPAT of AUD 1.721 billion was in line with our forecast. The group’s core Australian supermarkets—generating close to 90% of operating earnings—beat our expectations, offsetting weaker results from New Zealand Food and discount department store Big W.