The Woolworths share price leapt 5% in July, what’s in store now?

Supermarket trolley with groceries going up the stairs with a rising red arrow.

Supermarket trolley with groceries going up the stairs with a rising red arrow.

July was a top month for the S&P/ASX 200 Index (ASX: XJO) and many ASX 200 shares. Over the month just gone, the ASX 200 managed an increase of 5.7%. It was a similarly successful time for the Woolworths Group Ltd (ASX: WOW) share price as well.

Woolworths shares started July at a price of $35.60. But by the end of last week, the ASX 200 grocer had risen to $37.52 a share. That’s a gain worth 5.4%. Not quite as pleasing a gain as the ASX 200’s return, but certainly nothing one could arguably turn their nose up to.

After July, the Woolworths share price has now recorded a loss of close to 1% for the 2022 year to date. It’s also down by 2.77% over the past 12 months.

In contrast, the ASX 200 has performed even worse over these periods. The index is now down by 8.12% over 2022 so far, and down 6.7% over the past year. So that makes Woolies shares look pretty good.

But what of the future? What’s in store for the Woolworths share price over the next 12 months?

Is the Woolworths share price a buy today?

Well, analysts are rather united in their views of Woolies’ immediate future.

Earlier this week, my Fool colleague Brooke went through the current buy rating that ASX broker Citi has on Woolworths shares right now. The broker has a 12-month share price target of $42.50 on the company. This would represent an upside of 11.6% if it turns out to be accurate.

Citi reckons rising inflation will help Woolworths boost sales growth:

While the supermarkets have outperformed in recent months and are well held, we expect earnings upgrades could drive them further towards our revised target prices.

But Citi isn’t the only broker expecting big things from the Woolworths share price over the coming year.

As we also looked into last week, another ASX broker in Goldman Sachs is also bullish on Woolies today. Goldman also has a buy rating on the supermarket operator, with a share price target of $40.50. 

Goldman also likes how Woolworths is positioned today. It’s expecting both sales and earnings to grow significantly over the next two financial years “driven by effective cost-price pass through and additional mix improvement with relatively stable volume growth”.

This broker is also expecting this will enable Woolworths to lift its dividends to $1.18 per share by the end of FY2023.

So all in all, a very confident outlook for the Woolworths share price from these two ASX brokers. We’ll have to wait and see which one (or if either) proves correct with their expectations. But no doubt investors will be glad to hear these views.

At market close on Wednesday, this ASX 200 consumer staples share had a market capitalisation of $46.856 billion, with a dividend yield of 2.60%. 

The post The Woolworths share price leapt 5% in July, what’s in store now? appeared first on The Motley Fool Australia.

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