The Woolworths Group Ltd (ASX: WOW) share price has been a strong performer in 2021.
Since the start of the year, the retail conglomerate's shares are up a sizeable 16%.
In fact, adjusting for the demerger of Endeavour Group Ltd (ASX: EDV), the Woolworths share price has just reached a record high of $39.39.
What is the outlook for the Woolworths share price?
Given their strong performance this year, investors will no doubt be wondering where its shares are heading from here.
Unfortunately, the outlook for the Woolworths share price is not overly positive in the near term based on recent broker notes.
For example, a recent note out of Citi reveals that its analysts have a neutral rating and $37.60 price target on its shares. This implies potential downside of 4.5% over the next 12 months.
In addition to this, at the start of the month, the team at Morgan Stanley downgraded Woolworths shares to an equal-weight rating with a $36.50 price target.
According to the note, the broker made the move on valuation grounds. Though, on a positive note, its analysts believe the Woolworths post-demerger capital management will come in at the high end of its $1.6 billion to $2 billion range. It suspects that these funds will be returned to shareholders via an off-market buyback.
Finally, another broker that recently downgraded the Woolworths share price to a neutral rating was Goldman Sachs. It has put a $36.80 price target on its shares. Once again, valuation was the key driver of this downgrade.
The broker explained at the end of June: "While the short-term catalyst of an off-market buyback remains in play, we are taking advantage of the current strength in WOW to downgrade to Neutral. Since we upgraded WOW to a Buy rating on 7 March 2021 the share price has appreciated 14.1% prior to the demerger vs. the market up +8%."
