The Woolworths Group Ltd ( ASX: WOW The share price is showing positive gains today.
Shares in the S&P/ASX 200 Index (ASX: XJO) supermarket behemoth finished yesterday’s trading at $28.18 per share. By late Thursday morning, the stock was changing hands at $28.39 each, representing an increase of 0.8%.
The ASX 200 has gained 0.2% at this particular moment.
Even with today’s positive surge, the Woolworths share price continues to lag behind the benchmark, and its main competitor has outperformed. Coles Group Ltd ( ASX: COL ) within the last 12 months.
From the chart provided, we can observe that Woolworths' stock has decreased by slightly over 12% compared to this period last year. In contrast, although not depicted here, Coles' share price has increased by more than 14%, whereas the ASX 200 index has only risen modestly by about 1%.
Given this lack of performance, management took into account the recent unveiling of Woolworths' half-year resultados. results To emphasize several key steps the firm is implementing to reach its utmost capability.
Amanda Bardwell, the CEO of Woolworths, stated when looking forward to the coming year:
Our goals for 2025 are well-defined, and we've already begun implementing them. There’s a chance to enhance our customers' shopping journey even more; we're streamlining our operations and dedicated to realizing the complete potential of the company.
Moreover, the firm outlined five principal measures they are implementing, potentially bolstering the Woolworths stock value over an extended period. These actions include:
- Keep enhancing core retail elements such as value, product assortment, and stock availability.
- Streamline processes to enhance customer impact and achieve greater efficiency. This will result in approximately $400 million in cost savings for the support office operations.
- Integrate leadership and organizational modifications
- Effective launch and scaling of New South Wales supply chain facilities
- Evaluate the structure of the collective investmentportfolio
Currently, it's the second bullet point mentioned earlier, the $400 million in cost reductions, that has caught brokers' notice.
The value of Woolworths shares might improve as a result of redirected cost savings.
Morgan Stanley analyst Melinda Baxter predicts that Woolworths will plough back approximately $200 million in cost savings back into the business.
Based on Baxter (cited by The Australian Financial Review ):
Woolworths has not decided how much of the saved costs will be put back into the business, particularly in terms of pricing, versus adding to their profits. In our calculations, we assume that Woolworths will invest around half of these savings back into the company.
Baxter highlighted that this might increase earnings by approximately $150 million in the upcoming fiscal year, which could propel Woolworths' share price forward.
For the six-month period, Woolworths reported earnings before interest and tax of $1.45 billion, which represents a decrease of 14% compared to the previous year.
Jarden's Ben Gilbert mentioned that shareholders of the ASX 200 supermarket company can expect to gain from Woolworths' banking sector contributing at least $30 million in 2026.
According to Gilbert, they believe that for Woolworths, each segment of 25% saved is valued at over $1.20 per share.
The post How this $400 million initiative might boost the Woolworths stock value appeared first on The Motley Fool Australia .
Is it wise to put $1,000 into Woolworths Group Limited at this moment?
Prior to purchasing shares of Woolworths Group Limited, keep these points in mind:
Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks For investors looking to purchase at this moment... Woolworths Group Limited was not among those recommended.
The online investment service he's been running for over ten years, Motley Fool Share Advisor, has offered thousands of subscribing members with stock recommendations that have doubled, tripled, or even greater in value.*
Right now, Scott believes there might be five stocks that could be smarter choices for investment.
See The 5 Stocks *Returns as of March 6, 2025
More reading
- The top broker recommends purchasing shares in both Woolworths and Coles.
- Should you consider buying Woolworths shares today?
- Purchase Woolworths along with this ASX dividend stock.
- 10 top-performing ASX stocks to consider purchasing in March
- These Australian Securities Exchange stocks might increase by 20% to 70%.
Motley Fool contributor Bernd Struben does not hold any shares in any of the companies listed. Similarly, The Motley Fool Australia’s parent company, Motley Fool Holdings Inc., does not own any stakes in these mentioned firms. However, The Motley Fool Australia holds an interest in and recommends Coles Group. Additionally, The Motley Fool states their policy regarding ownership disclosures. disclosure policy This article includes solely general investment advice (covered under AFSL 400691). Authorized by Scott Phillips.
