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Highlights
- Stock Performance: Woolworths shares are up 0.04% in morning trade, while the ASX 200 is down 0.6%.
- Macquarie Upgrade: The brokerage firm has raised Woolworths to an "outperform" rating with a price target of AU$30.80, indicating a 9.4% upside.
- Regulatory Impact: The ACCC report is expected to act as a catalyst for a rebound, following a historical trend seen in other regulated industries
Shares of Woolworths Group Ltd (ASX:WOW) saw a slight uptick on Wednesday, trading at AU$28.15 in morning trade, up 0.04% from the previous close of AU$28.14. This minor gain comes despite the broader S&P/ASX 200 Index (ASX:XJO) dropping 0.6%, following Wall Street’s overnight decline, where the S&P 500 Index fell 1.1% amid ongoing tariff concerns.
Over the past 12 months, Woolworths shares have underperformed significantly, down 12.2%, while the ASX 200 gained 1.4%. Rival supermarket chain Coles Group Ltd (ASX:COL) has seen a 12.1% increase in the same period.
Macquarie analysts note that Woolworths shares are currently trading at a near five-year low relative to Coles. This valuation gap has been largely attributed to negative investor sentiment surrounding the upcoming Australian Competition and Consumer Commission (ACCC) inquiry report on the supermarket sector.
However, analysts believe that the release of the ACCC report, expected in the coming weeks, could serve as a turning point for both Woolworths and Coles stocks. Historically, similar regulatory reports have triggered a rebound in affected sectors, such as banking, childcare, and aviation stocks.
Macquarie’s Outlook and Price Target
Macquarie has upgraded Woolworths to an "outperform" rating, maintaining a price target of AU$30.80 per share. This forecast suggests a potential upside of 9.4% from current levels. Additionally, Woolworths offers a fully franked dividend yield of 4.8%, making it an attractive option for income-focused investors.
According to Macquarie’s analysis, stocks in industries under regulatory scrutiny tend to experience short-term declines before rebounding upon the release of final reports. On average, impacted companies have historically gained 17% after such reports were concluded.
Given this pattern, Macquarie sees Woolworths as well-positioned for a recovery and has also reaffirmed its "outperform" rating on Coles.





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