Woolworths Group Limited Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions
As you might know, Woolworths Group Limited (ASX:WOW) recently reported its yearly numbers. The result was positive overall - although revenues of AU$72b were in line with what the analysts predicted, Woolworths Group surprised by delivering a statutory profit of AU$0.93 per share, modestly greater than expected. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
After the latest results, the 15 analysts covering Woolworths Group are now predicting revenues of AU$74.8b in 2027. If met, this would reflect a reasonable 4.5% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to leap 57% to AU$1.46. Yet prior to the latest earnings, the analysts had been anticipated revenues of AU$74.6b and earnings per share (EPS) of AU$1.42 in 2027. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.
View our latest analysis for Woolworths Group
The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 6.2% to AU$39.35. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Woolworths Group analyst has a price target of AU$43.50 per share, while the most pessimistic values it at AU$31.50. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The period to the end of 2027 brings more of the same, according to the analysts, with revenue forecast to display 4.5% growth on an annualised basis. That is in line with its 4.7% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 5.3% annually. So although Woolworths Group is expected to maintain its revenue growth rate, it's only growing at about the rate of the wider industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Woolworths Group's earnings potential next year. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Woolworths Group analysts - going out to 2029, and you can see them free on our platform here.
Before you take the next step you should know about the 1 warning sign for Woolworths Group that we have uncovered.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.