WOW:ASXWoolworths Group Ltd Analysis

Woolworths Group (WOW) is trading at AUD 35.29, comfortably above its 20‑day (33.87), 50‑day (31.76) and 200‑day (30.08) moving averages, with a bullish MACD crossover (line 1.28 vs signal 1.24) and an RSI of 63 indicating continued upward momentum. Volume is on an increasing trend and the technical outlook remains bullish, supporting the recent 27% upside potential relative to the current price.
However, the fundamentals tell a different story: a trailing P/E of 72 (forward P/E ≈ 24) and a P/B of 9.3 suggest the stock is heavily overvalued, while the dividend payout ratio of 172% raises sustainability concerns. Earnings have slipped sharply – half‑year net profit fell from A$739 m to A$374 m – and the company carries a staggering debt‑to‑equity of 361%, far above typical consumer‑defensive peers. The DCF fair‑value estimate of roughly AUD 16.7 is less than half the market price, underscoring the valuation disconnect.