The Woolworths Group Ltd (ASX: WOW) share price is currently having a subdued finish to the week.
In morning trade, the retail giant’s shares are trading flat at $35.76.
Where next for the Woolworths share price?
One leading broker that believes the Woolworths share price could be heading higher from here is Citi.
According to a recent note, the broker has a buy rating and $40.30 price target on the retailer’s shares.
Based on the current Woolworths share price, this implies potential upside of almost 13% over the next 12 months.
And with Citi forecasting a fully franked 2.7% dividend yield in FY 2022 and then 3% in FY 2023, the total potential return on offer over the next 12 months is over 15%.
What did the broker say?
Citi was pleased with Woolworths’ performance during the first half, noting that its earnings were in line with expectations.
It commented: “Woolworths reported 1H22 EBIT of $1,382 million, consistent with guidance and inline with Citi and Visible Alpha consensus. Momentum in Australian Food improved following the mid-December trading update with EBIT at the top end of guidance and total sales growth of 3.6% in December.”
In addition to this, its analysts have named three reasons to be positive on the company’s outlook.
The broker explained: “We see an improving outlook given 1) eased restrictions and declining cases enabling a reduction in COVID costs and better operational efficiency; 2) food inflation lifting with shelf prices up ~2-3% in 2H22e to date; and 3) margin benefits as some online customers return to stores. We make small upward revisions to EBIT of ~1%.“
All in all, this could make the Woolworths share price one to consider if you’re looking for blue chip options this month.
The post Top broker tips Woolworths (ASX:WOW) share price to rise 13% appeared first on The Motley Fool Australia.
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Motley Fool contributor James Mickleboro 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 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 Bruce Jackson.
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