Have ASX investors missed their chance to buy Woolworths shares?

With the S&P/ASX 200 Index (ASX: XJO) hitting a few new all-time highs over the past week, it goes without saying that it’s been a very lucrative period to own many ASX 200 shares in recent months. That sentiment holds if we take a look at Woolworths Group Ltd (ASX: WOW) shares.

Woolworths’s share price performance during the first four months of 2024 was one of the worst it has experienced in years. The ASX 200 supermarket operator started the year at $37.51 a share.

By early May, those same shares had hit a new 52-week low of just $30.12. Not only was that a new 52-week low for Woolworths, but it was also the lowest its shares had traded at since the early days of COVID-19 in May 2020.

Investors reacted with dismay to Woolworths’ half-year earnings in February, which also unfortunately coincided with the abrupt resignation announcement of its outgoing CEO Bradford Banducci.

The result was a steep descent to that four-year low we saw in May. At the time, I wrote about this share price sell-off, concluding that the company was in a rare moment of value and calling the shares a buy over Woolworths’ arch-rival Coles Group Ltd (ASX: COL). I also pointed out that the Woolworths dividend yield, which was north of 3.4% at the time thanks to this share price drop, was unusually high at the time.

But ever since early May, Woolies has been slowly but steadily recovering. Today, Woolworths shares are trading at $35.15 each, up 0.43% for the day thus far. That means that the company is also up a whopping 16.3% or so from that 52-week low we saw in May today.

Check that out for yourself below:

Are Woolworths shares still a buy today?

Anyone who bought this company back in May would be sitting very prettily indeed on a healthy gain right now. But what about investors considering buying in today? Are Woolworths shares still a buy at their current pricing?

Well, those are hard questions to answer.

But we do know something for certain: Woolworths shares offer far less value today than they did two and a half months ago.

Back then, the company was offering a dividend yield of 3.4%. Today, it’s at 2.99%.

Back then, Woolworths shares were trading on an annualised price-to-earnings (P/E) ratio of 20.2. Today, it would be on 23 or so.

If Coles shares were the same ~$16 level they were in early May, I would say they represent better value today. However, Coles has also enjoyed a bit of a recovery in recent months, and today is up to around $17.63 a share.

As such, we have to conclude that both companies don’t really represent a compelling buying opportunity today. Sure, in my view, Woolworths shares aren’t overvalued. They aren’t at the near-$40 pricing we were seeing last year.

However, it’s still hard to call the company a screaming buy. If I owned Woolworths shares today, I wouldn’t be selling. But if I were looking to buy in, I’d probably wait for a better entry point.

The post Have ASX investors missed their chance to buy Woolworths shares? appeared first on The Motley Fool Australia.

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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 no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Coles Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.