While the Woolworths Group Ltd (ASX: WOW) share price is having a decent run over the last month — up 2.26% in a month, there’s another ASX supermarket that’s rocketing above it, and even the Coles Group Ltd (ASX: COL) share price.
Those are the shares of Metcash Limited (ASX: MTS). The IGA, Foodland, Mitre 10, and Cellarbrations brand owner is up 5.83% over the last 30 days. That’s higher than Woolworths and Coles, the latter up 5.32% in a month. For context, the S&P/ASX 200 Index (ASX: XJO) is 0.39% lower during that time.
Let’s take a closer look.
Why this company is outperforming the Woolworths share price?
As Motley Fool has previously reported, expert opinion is pessimistic on the Woolworths share price.
Credit Suisse has a sell on the company with a price target of around $31. That suggests the broker believes that Woolworths shares are going to drop by more than 20% over the next 12 months. It thinks it’s overvalued for its expected earnings and potential (limited) growth. Several others also have the company at ‘hold’ – valuing its shares at about $40.
Metcash, meanwhile, is the stock to buy – at least according to some brokers.
UBS currently rates Metcash shares as a buy, with a price target of $4.60. A change of consumer habits appears to have helped the business including higher levels of local shopping. Some of these changes could be permanent.
The broker believes Metcash could pay a grossed-up dividend yield of 6.5% in FY22.
What else is affecting Woolworths?
This month, Woolworths was in the sights of the Australian Parliament, specifically about the pay and working conditions of its delivery drivers, including its partnership with Uber Eats.
Last Monday, Australian Labor Senator Tony Sheldon accused Woolworths of turning a blind eye to the conditions to which Uber Eats delivery employees are subject. Correspondingly, Senator Sheldon purported that the multibillion-dollar ASX-listed company is neglecting its responsible sourcing standards in the process.
This news may have been a drag on the Woolworths share price as its shares were down on the same day.
Woolworths share price snapshot
Over the past 12 months, the Woolworths share price has increased 15.77%. Year-to-date, shares in the company are up 16%. Its 52-week high is $44.06 and its 52-week low is $35.96.
Woolworths Group has a market capitalisation of approximately $48 billion.
The post Why this supermarket is outperforming the Woolworths (ASX:WOW) share price lately appeared first on The Motley Fool Australia.
Should you invest $1,000 in Metcash right now?
Before you consider Metcash, you’ll want to hear this.
Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Metcash wasn’t one of them.
The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.
*Returns as of August 16th 2021
More reading
- Woolworths (ASX:WOW) share price edges lower following share buy-back completion
- Own Woolworths (ASX:WOW) shares? Here’s how the retail giant is using AI to combat self-serve cheats
- Own Woolworths (ASX:WOW) shares? Here’s why the company is making news this week
- Can the Woolworths (ASX:WOW) share price hit $45 by the end of 2021?
- Why this expert reckons the Woolworths (ASX:WOW) share price is on special
Motley Fool contributor Marc Sidarous 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 owns shares of and has recommended COLESGROUP DEF SET. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
from The Motley Fool Australia https://ift.tt/2Z1J6Jq
Leave a Reply