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Investing.com - JPMorgan has upgraded Woolworths Group Limited (ASX:WOW) (OTC:WOLWF) from Underweight to Neutral and slightly raised its price target to AUD31.00 from AUD30.50.
The upgrade comes after Woolworths shares experienced a de-rating ahead of the company’s fiscal year 2025 results, with the stock trading down toward JPMorgan’s previous price target due to consensus earnings concerns.
Despite the rating upgrade, JPMorgan has downgraded Woolworths’ group earnings forecasts by 0.8% for FY25, 1.6% for FY26, and 2.3% for FY27, primarily due to operating deleverage in the Australian Food segment resulting from lower sales projections.
The firm’s earnings downgrades in the Australian Food segment are partially offset by the removal of MyDeal losses, which boost the W Living segment in JPMorgan’s updated model.
JPMorgan notes that its EBIT (Earnings Before Interest and Tax) estimates are approximately in line with consensus for FY25 (1.2% above), but fall below consensus by 4.0% for FY26 and 5.4% for FY27.
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