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The Woolworths Group Ltd (ASX: WOW) share value can be beneath the microscope this week because the grocery store enterprise releases its FY22 report on Thursday.
Loads of S&P/ASX 200 Index (ASX: XJO) shares have already reported their outcomes for the six or 12 months to 30 June 2022.
As considered one of Australia’s greatest firms, with a market capitalisation of $47 billion in response to the ASX, Woolworths is an attention-grabbing enterprise to contemplate.
What ought to traders take note of with Woolworths’ end result?
Clearly, there can be a heavy deal with how a lot revenue Woolworths makes.
Internet revenue: Each analyst could have completely different estimates on how a lot revenue Woolworths goes to report for the 2022 monetary yr. On CMC Markets, Woolworths is predicted to generate earnings per share (EPS) of $1.20. That will put the present Woolworths share value at greater than 31x FY22’s projected revenue.
However, I believe there are a selection of different areas that traders ought to take a look at with Woolworths.
Inflation handed via to prospects: How a lot inflation Woolworths noticed within the fourth quarter and the way a lot of a lift to gross sales this prompted can be attention-grabbing to see. Woolworths’ feedback about inflation expectations in FY23 may very well be significantly attention-grabbing and influential on traders’ ideas.
Price inflation: Nevertheless, Woolworths additionally has one of many greatest workforces in Australia. So, it is going to be attention-grabbing to see how a lot the corporate’s wage invoice has elevated and if administration makes any feedback about that. Inflation received’t be a constructive for Woolworths shares and earnings if its prices are going up strongly as nicely. The prices of the availability chain might even have elevated.
Retail growth: Woolworths has been making strikes to diversify and develop its enterprise via acquisitions. For instance, it’s shopping for 80% of Mydeal.Com Au Ltd (ASX: MYD) with a suggestion that implied an enterprise worth of $243 million. It additionally introduced a $150 million deal to purchase Shopper Media Group. It is going to be attention-grabbing to listen to from Woolworths about its technique with these acquisitions and whether or not it is going to be making additional strikes.
Buying and selling replace: There could also be fears that the excessive charge of inflation means households scale back their spending in some areas. Will Woolworths’ buying and selling replace and outlook commentary present that households proceed to spend on the grocery store?
Woolworths share value newest
The Woolworths share value is basically flat over 2022 up to now, regardless of the assorted impacts of inflation and rising rates of interest on investor sentiment.
Some traders are destructive on the corporate heading into the end result. For instance, Credit score Suisse presently charges Woolworths as ‘underperform’ with a value goal of $32.03. That suggests a drop of round 15% over the following yr.
In late afternoon buying and selling on Tuesday, the Woolworths share value is down 2.5% at $38.055.
