Woolworths (WOW) miss sales expectations
WOW -3.24%: Lower today on a weaker than expected trading update, particularly their comments around October trading to date (post end of lockdown) having slowed further as we all go out and socialize. For 1Q22 sales growth of 2.7% was actually okay given this is being comped on last year which was particularly strong, however there is clear evidence now that lockdowns gave them a sugar hit which is dissolving. On 28x forward versus ~20x average, WOW is still expensive and could easily re-rate further towards $30 (it’s worth $27.31 if we price it on it’s 5n year average P/E of 19.9x)
MM likes WOW into weakness, but prefer Metcash
Add To Hit List
