After an initial pop this morning, the S&P/ASX 200 Index (ASX: XJO) is deep in the red so far this Tuesday, currently down 0.34% at 7,345 points. In stark contrast, the Woolworths Group Ltd (ASX: WOW) share price is enjoying some healthy gains today. Woolworths shares are currently up by 1.44% to $38.72 a share at the time of writing.
But zooming out a little, and the picture is far less cheerful. Woolworths shares are now down just over 5% from where they started last Tuesday's trading session at. That's a pretty steep fall for just one week. Especially for an ASX 200 blue-chip stalwart like Woolies.
So what's going on with this grocery giant to cause it to have such a poor week?
We can probably lay most of the blame on Woolworths' quarterly earnings update that the company released last Wednesday. For the 14 weeks ending 3 October, the company reported a 7.8% increase in sales year on year to $16.07 billion. That included $1.88 billion in e-commerce sales, a 53.5% jump over last year's figures.
That all sounds positive. But what really seemed to have spooked investors and led to a drop in the Woolworths share price was management's commentary:
Q1 F22 has arguably been the most challenging COVID quarter for our business, with the Delta variant causing major disruptions to our supply chain and stores, especially in NSW and Victoria…
While the outlook remains uncertain, and there is likely to be challenges in the weeks ahead, we are excited about helping our customers celebrate a much needed festive season in an inspirational, safe and enjoyable way.
After this update was released, the Woolworths share price fell roughly 2.5% and has yet to recover.
Could the Woolworths share price be a buy today?
With this significant pullback in the Woolworths share price, some investors might be wondering if it's a good time to buy. Well, reception to this trading update was less than well-received by expert investors.
As my Fool colleague James covered last week, broker Credit Suisse wasn't impressed with what Woolies had to say. It retained an 'underperform' rating on the company, with a 12-month share price target of $31.84. Credit Suisse simply thinks the company's shares are overvalued at their current pricing. It also expects it to face some tightening profit margins.
At the current Woolworth share price, this company has a market capitalisation of $46.15 billion. It also has a price-to-earnings (P/E) ratio of 31.1 and a dividend yield of 2.8%.
