Woolworths Shares Show Signs of Recovery
Woolworths Group Ltd (ASX: WOW) shares closed on Wednesday afternoon with a slight increase of 0.19%, reaching $31.75 per share. This modest gain continues a positive trend for the supermarket giant in 2026 so far. The stock has risen by 7.88% year-to-date and 5.59% over the past year. Most notably, the current share price reflects a 22.5% recovery from an all-time low of $25.91 recorded in October last year.
The company’s shares experienced a significant drop of nearly 20% in August of the previous year following a disappointing FY25 result. The stock hit its lowest point in mid-October but managed to stabilize after a more positive first-quarter sales update was released.
Despite no recent price-sensitive news from the company, Woolworths is set to release its half-year FY26 results later this month on February 25th. Investor confidence appears to be gradually returning, even in the face of the latest Reserve Bank interest rate hike.
Analysts Are Divided on Woolworths’ Future
Analysts are split on whether Woolworths shares are a buy, sell, or hold at this time. According to TradingView data, four out of 14 analysts have a buy or strong buy rating on the stock, while the remaining ten analysts have a hold rating. The average target price for the stock is $30.97 per share, indicating a potential 2.45% decline at the time of writing. However, the maximum target price stands at $37 per share, which could represent a 16.5% increase for investors this year.
Hallihan has assigned a hold rating to the supermarket giant. The broker highlighted that Woolworths is slowly recovering after its first-quarter results late last year. They noted that while the company acknowledged that first-quarter sales were below expectations, group sales increased by 2.7%, and food sales rose by 2.1% compared to the previous 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.”
Why Woolworths Shares May Still Be Worth Buying
Supermarkets are inherently defensive ASX stocks. Even if confidence and customer sentiment decline, and people have less money due to rising inflation, they still need to purchase groceries. The benefit of Woolworths lies in its scale, which provides the company with strong buying power, an extensive supply chain, and the ability to invest in efficiency over time.
Woolworths shares are still considered a good investment for passive income. In FY25, the supermarket business distributed 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.
Considerations Before Investing
Before investing in Woolworths Group Limited shares, it is essential to consider various factors. Motley Fool investing expert Scott Phillips recently revealed what he believes are the five best stocks for investors to buy right now, and Woolworths Group Limited was not among them.
The online investing service he has run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have seen significant returns. Currently, Scott believes there are five stocks that may be better buys than Woolworths.
For those interested in further reading, the following topics may be relevant:
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- Are these the best blue-chip ASX shares money can buy?
- Are Woolworths shares a good buy today amid rising interest rates?
- Buy, hold, sell: Wesfarmers, Woolworths, CSL shares
- Passive income: How much do you need to invest to make $500 per month?
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.
