WOW has traded sideways over the last month since reporting a ~2% beat to 1H23 consensus profit expectations driven by higher margins in their food business. Sales of $33.2bn were up 4% YoY, just ahead of the $33.1bn expected while NPAT of $907m beat the $875m most analysts were flagging. We are seeing signs that consumers are already buying cheaper alternatives at the supermarket but the impact on WOW has been relatively minor through Q1, this could obviously change if we experience a deep recession moving forward.
- Similar to COL we like WOW but the risk/reward is not exciting around $37.50.
MM is neutral towards Woolworths (WOW) around $37.50
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