Here’s a look at what might happen to Woolworths shares in FY2023

Woman thinking in a supermarket.

Woman thinking in a supermarket.

The Woolworths Group Ltd (ASX: WOW) share price was a standout performer on the S&P/ASX 200 Index (ASX: XJO) last financial year. Over FY2022, Woolworths shares recorded a loss of 0.6%, closing out the financial year at $35.60 a share.

A loss of 0.6% might not look like a winning proposition for many investors. But considering the broader ASX 200 fell by a far nastier 10.19% between 1 July 2021 and 30 June 2022, it was considerably better to own Woolies shares than the index.

Further, Woolworths shares paid out a total of 94 cents per share in fully franked dividends. That’s enough to pull the company into positive return territory for FY2022.

But now FY2022 is well behind us and we’ve already embarked on the 2023 financial year, what might the next 12 months or so hold in store for the Woolworths share price?

Is it buy or sell for the Woolworths share price in FY2023?

Well, one broker is extremely bullish on Woolies shares going forward, even after the positive year the company enjoyed over FY2022.

As my Fool colleague James covered last week, ASX broker Goldman Sachs is currently rating Woolworths shares as a “buy”. It also has a 12-month share price target of $41.70 on the supermarket operator’s shares.

If that came to pass, it would represent a potential upside of just over 12.8% from the $36.96 share price the company is commanding today (at the time of writing).

So why is Goldman so optimistic on Woolworths shares over this current financial year? The broker is estimating that Woolies will be able to continue to grow both revenues and earnings going forward. Here’s some of what it had to say on its projections:

We are encouraged by the resilience and superior operations of WOW and reiterate our unchanged FY22-24e Sales and EPS CAGR of 6.9% and 14.9% respectively. We expect this to be driven by high price growth, well protected GPM and slight EBIT margin expansion as COVID costs roll-off and cost efficiencies continue.

So a very positive outlook on Woolworths share price from Goldman Sachs. Only time will tell if this outlook proves to be accurate though. Even so, it’s no doubt music to Woolworths shareholders’ ears today.

At the current Woolworths share price, this ASX 200 blue chip share has a market capitalisation of $44.87 billion, with a fully franked dividend yield of 2.54%.

The post Here’s a look at what might happen to Woolworths shares in FY2023 appeared first on The Motley Fool Australia.

Three inflation fighting stocks no ones’ talking about

Savvy Motley Fool investors may have already found three stock moves to help fight inflation.
Three ASX stocks that could be hiding right under your nose.

Learn More
*Returns as of July 1 2022

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];[property] = defaultValue;

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);

More reading

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s