Woolworths Group Limited Falls Short of Analyst Expectations: Current Forecasts from Analysts

Woolworths Group Limited Performance Overview

• Recent Stock Decline: Woolworths Group Limited's stock has dropped 13% to AU$28.80 following disappointing yearly results, with statutory earnings missing estimates by 31% at AU$0.78 per share.
• Revenue Insights: The company reported revenues of AU$69 billion, aligning with analyst expectations, but the significant shortfall in earnings has raised concerns among investors.

Future Projections and Analyst Sentiment

• Revenue Forecasts: Analysts predict revenues will reach AU$71.6 billion by 2026, reflecting a modest 3.6% growth compared to the previous year. This is a slight decrease from earlier forecasts of AU$72.0 billion.
• Earnings Per Share Expectations: EPS is expected to increase by 58% to AU$1.24, although this is down from previous estimates of AU$1.37, indicating a decline in overall sentiment.

Price Target Adjustments

• Average Price Target: The average price target for Woolworths has decreased by 6.8% to AU$30.51, influenced by reduced earnings forecasts.
• Analyst Range: The most optimistic analyst has set a target of AU$33.70, while the most pessimistic is at AU$28.25, suggesting a relatively narrow range of expectations regarding the company's future.

Industry Comparison and Growth Rates

• Growth Rate Analysis: Woolworths' projected annualized growth rate of 3.6% until 2026 is below its historical growth rate of 6.3% over the past five years. This growth rate is slightly above the industry average of 3.2%.
• Concerns Ahead: The reduction in EPS estimates raises concerns about potential business headwinds, although revenue forecasts remain stable.

Long-Term Outlook and Caution

• Long-Term Earnings Power: Analysts emphasize the importance of long-term earnings potential over short-term profits, with forecasts extending to 2028 available for review.
• Warning Signs: The article notes three warning signs for Woolworths Group that investors should consider, indicating potential risks in the company's future performance.