Woolworths Group Ltd (WOW) AI Stock Analysis

• Market Cap: $40.66B
• Dividend Yield: 2.36%
• Average Volume (3M): 2.04M
• Price to Earnings (P/E): 24.4
• Beta (1Y): 0.63
• Revenue Growth: 5.26%
• EPS Growth: N/A
• Country: AU
• Employees: 201,413
• Sector: Consumer Defensive
• Sector Strength: 49
• Industry: Grocery Stores
• EPS (TTM): 0.52
• Shares Outstanding: 1,221,595,300
• 10 Day Avg. Volume: 2,454,864
• 30 Day Avg. Volume: 2,036,310
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.34
• Enterprise Value/Revenue: 0.79
• Enterprise Value/Gross Profit: 2.90
• Enterprise Value/Ebitda: 9.12
• 1Y Price Target: $32.58
• Price Target Upside: -2.51% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 10

• Rating: 64 Neutral
• Price Target: AU$34.00 ▲(1.74% Upside)

The overall stock score of 63.8 reflects the significant challenges Woolworths faces in profitability and leverage, despite strong revenue growth and some positive developments in eCommerce and sustainability. The technical indicators suggest a neutral outlook, and while the valuation is moderate, it does not offer a compelling discount. Earnings call insights highlight ongoing strategic adjustments needed to address operational inefficiencies and market pressures.

Positive Factors

Dividends

The company declared A$0.57/sh normal dividend and a A$0.4/sh special dividend.

Earnings

Woolworths has seen strong recovery on a combination of subsiding regulatory concerns and improving execution.

Negative Factors

Financial Performance

A drag is expected in NZ Foods, Big W, and Interest Expense, affecting overall performance.

Woolworths Group Ltd Business Overview & Revenue Model

Company Description

Woolworths Group Ltd (WOW) is a leading Australian retail company, primarily operating in supermarkets and grocery stores. The company is headquartered in Bella Vista, New South Wales, and it manages a diverse portfolio of retail brands, including Woolworths Supermarkets, Countdown in New Zealand, and Big W. Woolworths Group also has a significant presence in the liquor retail sector through brands like Dan Murphy's and BWS. Additionally, the company is involved in the hotel and gaming sectors through its ownership of ALH Group.

How the Company Makes Money

Woolworths Group Ltd generates revenue primarily through the sale of groceries, fresh produce, and general merchandise in its supermarkets and grocery stores across Australia and New Zealand. The company's key revenue streams include retail sales from its network of Woolworths and Countdown supermarkets, as well as from its discount department store chain, Big W. In the liquor segment, Woolworths earns income through its Dan Murphy's and BWS stores. Additionally, the company's hotels and gaming operations, managed under the ALH Group, contribute to its earnings via food, beverage, and gaming machine revenues. Woolworths also benefits from its customer loyalty program, Everyday Rewards, which drives repeat sales and customer engagement. Strategic partnerships with suppliers and an extensive supply chain network further enhance its profitability.

Woolworths Group Ltd Financial Statement Overview

Summary

Woolworths Group Ltd shows strong revenue growth and stable gross margins but faces profitability issues due to declining net, EBIT, and EBITDA margins. The high debt-to-equity ratio indicates leverage risks, and while cash flow generation is robust, the decline in free cash flow poses liquidity concerns.

Income Statement

Woolworths Group Ltd has shown consistent revenue growth, with a revenue growth rate of 5.65% from 2023 to 2024. The gross profit margin is solid at 27.32%, indicating good control over cost of goods sold. However, the net profit margin has declined to 0.16% due to significant reductions in EBIT and EBITDA margins, which are 1.92% and 5.20%, respectively. These margins suggest profitability challenges, despite revenue growth.

Balance Sheet

The company's debt-to-equity ratio is relatively high at 3.09, highlighting significant leverage. However, the equity ratio of 15.93% shows a moderate level of equity financing. Return on equity has decreased to 2.00%, reflecting diminished net income against equity. Overall, the balance sheet presents leverage risks but maintains adequate asset backing.

Cash Flow

Free cash flow decreased by 20.51% from 2023 to 2024, indicating potential liquidity issues. The operating cash flow to net income ratio is strong at 40.36, showcasing robust cash generation relative to net earnings. However, the free cash flow to net income ratio is 16.76, which reflects a decline in free cash flow efficiency.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	67.92B	64.29B	60.85B	55.73B	53.08B
Gross Profit	18.55B	17.18B	18.04B	16.33B	15.33B
EBITDA	3.53B	5.36B	5.05B	5.43B	4.48B
Net Income	108.00M	1.62B	1.55B	2.07B	1.17B
Balance Sheet
Total Assets	33.94B	37.18B	33.27B	39.24B	38.47B
Cash, Cash Equivalents and Short-Term Investments	1.30B	1.14B	1.03B	1.01B	2.07B
Total Debt	16.72B	15.73B	16.76B	14.89B	18.66B
Total Liabilities	28.37B	30.61B	27.17B	37.50B	29.44B
Stockholders Equity	5.41B	6.42B	5.98B	1.38B	8.74B
Cash Flow
Free Cash Flow	1.81B	2.28B	1.01B	2.25B	2.42B
Operating Cash Flow	4.36B	4.80B	3.43B	4.64B	4.57B
Investing Cash Flow	-2.31B	-1.89B	-2.51B	-2.21B	-1.95B
Financing Cash Flow	-1.92B	-2.81B	-1.34B	-3.04B	-1.61B

Woolworths Group Ltd Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 33.42
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:WOW, the sentiment is Positive. The current price of 33.42 is above the 20-day moving average (MA) of 32.21, above the 50-day MA of 31.64, and above the 200-day MA of 30.68, indicating a bullish trend. The MACD of 0.46 indicates Negative momentum. The RSI at 64.64 is Neutral, neither overbought nor oversold. The STOCH value of 59.47 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AU:WOW.

Woolworths Group Ltd Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
WOW	64 Neutral	$40.66B	24.44	32.27%	2.36%	5.26%	―
Sector *	63 Neutral	$20.46B	14.51	-3.60%	3.15%	2.60%	-5.31%
CLEGF	―	$19.61B	25.24	28.51%	2.56%	―	―
MCSHF	―	$2.98B	15.02	18.20%	4.63%	―	―

Woolworths Group Ltd Corporate Events

Woolworths Group to Close MyDeal and Focus on Marketplace Consolidation

Woolworths Group Ltd has announced the closure of its MyDeal customer website by 30 September, as part of a strategic move to consolidate its marketplace offerings into BIG W Market and Everyday Market. This decision aims to reduce operating losses and capitalize on the strong traffic growth of its existing digital platforms. The closure is expected to incur cash costs of $90 – $100 million and non-cash costs related to asset impairment, with further updates to be provided in August.

The most recent analyst rating on (AU:WOW) stock is a Hold with a A$33.00 price target. To see the full list of analyst forecasts on Woolworths Group Ltd stock, see the AU:WOW Stock Forecast page.

Woolworths Group Seeks Quotation for New Securities

Woolworths Group Limited has announced the application for the quotation of ordinary securities to satisfy future vesting of share rights under the NED Equity Plan. This move is part of their strategic financial operations, potentially impacting their market positioning and providing value to stakeholders.

The most recent analyst rating on (AU:WOW) stock is a Hold with a A$33.00 price target. To see the full list of analyst forecasts on Woolworths Group Ltd stock, see the AU:WOW Stock Forecast page.

Woolworths Group Issues Unquoted Equity Securities for Employee Incentive

Woolworths Group Limited announced the issuance of unquoted equity securities under an employee incentive scheme. This move involves the allocation of performance rights and share rights, which are subject to transfer restrictions until certain conditions are met. This initiative is likely aimed at aligning employee interests with company performance, potentially enhancing workforce motivation and retention.

The most recent analyst rating on (AU:WOW) stock is a Hold with a A$33.00 price target. To see the full list of analyst forecasts on Woolworths Group Ltd stock, see the AU:WOW Stock Forecast page.

Woolworths Group Announces Cessation of Securities Due to Unmet Conditions

Woolworths Group Limited announced the cessation of certain securities, specifically 264,413 performance rights and 38,446 share rights, due to unmet conditions. This announcement may impact the company’s capital structure and could have implications for stakeholders, reflecting potential challenges in meeting performance criteria.

The most recent analyst rating on (AU:WOW) stock is a Hold with a A$33.00 price target. To see the full list of analyst forecasts on Woolworths Group Ltd stock, see the AU:WOW Stock Forecast page.

Woolworths Group Director Increases Shareholding

Woolworths Group Limited has announced a change in the director’s interest, with Maxine Brenner acquiring an additional 470 ordinary shares through her superannuation fund, bringing her total to 8,935 shares. This acquisition reflects a strategic move within the company’s leadership, potentially impacting shareholder confidence and market perception.

The most recent analyst rating on (AU:WOW) stock is a Hold with a A$33.00 price target. To see the full list of analyst forecasts on Woolworths Group Ltd stock, see the AU:WOW Stock Forecast page.

Woolworths Director Increases Shareholding

Woolworths Group Limited announced a change in the director’s interest notice, revealing that Director Maxine Brenner has increased her indirect interest in the company’s ordinary shares. The transaction involved the acquisition of 625 shares, bringing her total to 8,465 shares, which were purchased on the market for $20,401.05. This change reflects a strategic move in the director’s investment portfolio, potentially indicating confidence in the company’s future performance.