Are Woolworths shares a good buy today amid rising interest rates?

Woolworths Group Ltd (ASX: WOW) shares are marching higher today.

Shares in the S&P/ASX 200 Index (ASX: XJO) supermarket giant closed on Friday trading for $31.45. In afternoon trade on Monday, shares are changing hands for $31.69 apiece, up 0.8%.

For some context, the ASX 200 is up 2% at this same time.

Taking a step back, Woolworths shares have gained 5.7% over the past 12 months, modestly outpacing the 4.8% one-year gains posted by the benchmark index.

And that’s not including the two fully-franked dividends the ASX 200 supermarket paid out over this period. Woolworths stock currently trades on a fully-franked trailing dividend yield of 2.7%.

It’s also worth noting that Woolies shares have gained 2.6% since market close on 2 February, or more than twice the 1.2% gains delivered by the ASX 200.

I bring that up because, as you’re likely aware, at its first meeting of 2026 on 3 February, the RBA announced a 0.25% boost in the official interest rate to 3.85%.

“The board judged that inflation is likely to remain above target for some time and it was appropriate to increase the cash rate target,” the central bank said in making its decision.

So, with Woolies revenue linked to a large number of items consumers simply have to have regardless of inflationary or interest rate pressures, is the ASX 200 stock a good buy today?

Should you buy Woolworths shares today?

Family Financial Solutions’ Jabin Hallihan recently analysed the outlook for the Aussie supermarket giant (courtesy of The Bull).

“The share price of this supermarket giant is slowly recovering after releasing its first quarter sales results in fiscal year 2026 to the market on October 29, 2025,” Hallihan said.

Indeed, Woolworths shares have now gained 17.7% since market close on 28 October.

Investors’ response to those first-quarter sales results marked a pleasing change from the big sell-down that followed the release of the company’s full-year FY 2025 results on 27 August.

Woolworths shares plunged 14.7% on 27 August and continued to slide from there until plumbing multi-year closing lows on 14 October.

Investors sent the stock tumbling 14.7% on the day of the FY 2025 results release after Woolworths reported a 12.6% year-on-year fall in earnings before interest and tax (EBIT) to $2.75 billion. On the bottom line, FY 2025 net profit after tax (NPAT) of $1.39 billion was down 17.1%.

As for those more pleasing Q1 FY 2026 results, Hallihan said:

While Woolworths acknowledged first quarter sales were below aspirations, group sales of $18.5 billion were up 2.7% on the prior corresponding period. Australian food sales were up 2.1%.

Still, despite the appeal of higher interest rates, Hallihan isn’t ready to pull the trigger on Woolworths shares yet, issuing a hold recommendation.

He concluded, “Competitive pricing and cost pressures limit near term upside, but scale advantages remain intact. The company’s defensive characteristics appeal in an economy of higher interest rates.”

The post Are Woolworths shares a good buy today amid rising interest rates? appeared first on The Motley Fool Australia.

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Motley Fool contributor Bernd Struben 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 Woolworths Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.