ACCC’s report could create ‘buying opportunity’ for | Australian Markets
Woolworths shares have rebounded as Macquarie analysts anticipate traders to snap up grocery store shares following the release of the competitors regulator’s report into the sector.
Macquarie analysts have upgraded Woolworths to outperform with an unchanged goal price of $30.80 after reviewing its investment thesis for supermarkets forward of the Australian Competitors and Client Fee’s ultimate report, which now sits with the Treasury.
Analysts on the investment bank stated historical past urged a potential shopping for alternative, pointing to previous consumer-facing regulatory inquires into banks, Qantas and childcare.
“Our analysis . . . suggests the market tends to ‘sell the rumour’ and ‘buy the fact’,” they informed purchasers on Tuesday.
“100 days prior to the final reports being released, these groups on average delivered a one per cent fall in return.
“However, upon conclusion or release of the final report, there is a significant turnaround in performance.”
On average, these teams generated a 17 per cent return following the release of the reviews. For the supermarkets, Macquarie stated it noticed this as an alternative for a re-rating.
“This is particularly true for Woolworths, which is currently trading at close to a five-year low relative valuation (compared with Coles),” they stated.
“We believe largely driven by negative sentiment as a result of press and ACCC focus.”
Woolworths shares have been up 1.1 per cent to $28.05, after sinking to $27.75 on Monday, its lowest up to now this 12 months. Coles shares have been down 0.2 per cent to $18.56.
Macquarie left its outperform score on Coles unchanged, with margins persevering with to benefit from provide chain investments. It expects the 2026 financial 12 months to be a “particularly strong year” for Coles.
The ACCC’s ultimate report into its year-long inquiry into the grocery store sector was delivered to Treasury on the finish of February. Its ultimate publication date is unclear.
Coles boss Leah Weckert final week stated whereas she doesn’t know what’s contained within the report, she was anticipating new guidelines and suggestions round provider relationships and pricing transparency.
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