Woolworths shares recover 22% from all-time low: Buy, sell or hold?

Woolworths Group Ltd (ASX: WOW) shares closed 0.19% higher on Wednesday afternoon, at $31.75 a piece. 

Today’s marginal gain follows a continued upward trend for the supermarket giant in 2026 so far. Woolworths shares are 7.88% higher for the year-to-date and 5.59% higher for the year.

Most impressively, the current share price represents a 22.5% recovery from an all-time low of $25.91 in October last year.

The ASX supermarket’s shares crashed nearly 20% in August last year after it posted a disappointing FY25 result. The stock dropped to its all-time low in mid-October. It was saved from any further decline after the company posted a more positive first-quarter sales update. 

There hasn’t been any price-sensitive news out of the company in 2026, but the business is expected to post its half-year FY26 results later this month on Wednesday, the 25th of February.

It looks like investor confidence has continued returning. And even the latest Reserve Bank interest rate hike has done nothing to dent sentiment.

Are Woolworths shares a buy, sell or hold this year?

Analysts are divided about Woolworths’ shares right now. TradingView data shows that 4 out of 14 analysts have a buy or strong buy rating on the stock. The other 10 analysts have a hold rating.

The average target price is $30.97 per share, implying a 2.45% downside at the time of writing. The maximum target price is $37 per share, which implies a potential 16.5% increase for investors this year.

Hallihan has a hold rating on the supermarket giant. The broker noted that the supermarket giant is slowly recovering after its first-quarter results late last year. The team added that while Woolworths acknowledged that first-quarter sales were below expectations, group sales were up 2.7% and food sales were up 2.1% versus the prior period. 

“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.”

But there’s another reason that Woolworths shares are still worth buying

Supermarkets are inherently defensive ASX stocks. Confidence and customer sentiment might fall, and people might have less money in their pockets if inflation keeps rising, but they still need to buy groceries. 

The benefit of Woolworths is its scale. This gives the company strong buying power, an extensive supply chain, and the ability to invest in efficiency over time.

The shares are still a good buy for passive income. In FY25, the supermarket business handed out a total of 85 cents per share, fully franked. Bell Potter expects the ASX retail stock to pay a boosted fully-franked dividend of 91 cents per share in FY26 and then 100 cents per share in FY27. 

The post Woolworths shares recover 22% from all-time low: Buy, sell or hold? appeared first on The Motley Fool Australia.

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Motley Fool contributor Samantha Menzies 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.