Why this top broker is tipping 23% upside for the Woolworths share price

The Woolworths Group Ltd (ASX: WOW) share price has fallen in the past month, but could it turn around in the future?

Woolworths shares have lost almost 6% since market close on 9 August and are currently trading at $35.93. In today’s trade, they are down 1.75%.

Let’s take a look at the outlook for this supermarket giant.

What do the brokers say?

Woolworths’ net profit and sales lifted in FY22, and one leading broker is tipping its shares to move higher.

Goldman Sachs recommends investors buy the Woolworths share price and have placed a $44.10 target on the company’s shares, a potential upside of 22.7%.

Goldman was impressed with Woolworths’ financial results and is optimistic the company will continue to grow.

Commenting on these results, Goldman analysts said:

Results were of high quality with AU supermarket comp store growth of 5.2% in 4Q22 driven by strong price and positive mix.

Woolworths reported a net profit after tax (NPAT) of $1.5 billion in FY22, a 0.7% gain on the previous year.

Group sales lifted 9.2% on the previous financial year to $61 billion. The company’s retail e-commerce sales grew 33.6% in FY22.

Goldman is also optimistic about Woolworths’ digital and omni-channel advantage and sees it boosting market share and providing margin gains in the future.

Analysts are predicting Woolworths will deliver a fully franked dividend of $1.07 per share in FY23 and $1.16 in FY24. The company paid a final dividend of 92 cents per share in FY22.

Woolworths share price snapshot

The Woolworths share price has fallen nearly 10% in the past year and 5% year to date.

Woolworths has a market capitalisation of about $43.7 billion based on the current share price.

The post Why this top broker is tipping 23% upside for the Woolworths share price appeared first on The Motley Fool Australia.

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Motley Fool contributor Monica O’Shea 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.

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