What's in store for the Woolworths share price in December?

Can Woolies shares bring your portfolio some Christmas cheer?

Sebastian Bowen

Author Bio Sebastian Bowen has been a Motley Fool contributor since late 2018. Sebastian found his passion for writing and educating others about shares and all things finance after completing his studies in political, economic and social science and enjoys bringing this passion to life at the Fool. His investment philosophy is a simple one – buying high-quality companies at prices that make sense. When he’s not researching his next investment at all hours of the morning, Sebastian enjoys classic movies and likes to unwind with a good book, newspaper or record. Areas of Expertise Dividend investing ETFs Education Bachelor of Political, Economic, and Social Sciences (Government and International Relations), University of Sydney Social Media X/Twitter Favorite Investment Quote "In the short run, the market is a voting machine, but in the long run, it is a weighing machine." – Benjamin Graham

Published December 6, 2022 1:47 pm AEDT

It's been a rather wild and woolly year for the Woolworths Group Ltd (ASX: WOW) share price in 2022 so far. Year to date, Woolworths shares remain down a painful 9.88% at the current pricing. The supermarket giant started the year at $38.47 a share but is going for just $34.68 each today.

During 2022, the Woolworths share price has been as high as $39.50 and as low as $31.67, with plenty of swings along the way, as you can see here:

This shaky performance from Woolies might come as a surprise. After all, 2022 was supposed to be a year dominated by concerns over inflation and rising interest rates. And as a consumer staples giant, Woolies has a reputation as an inflation-resistant investment.

And yet, it has vastly underperformed the broader market. While Woolworths is down by 9.88% this year, the S&P/ASX 200 Index (ASX: XJO) has only lost 3.7% over the same period.

But perhaps Woolworths is set for a Santa rally. After all, the Christmas period is traditionally a strong one for supermarkets like Woolworths. And the grocer has just banked a very pleasing November. So could Woolies shares be worth buying in December?

Will you get your Woolies worth with Woolworths shares this Christmas?

Well, one ASX broker certainly thinks so. As my Fool colleague James recently covered, ASX broker Goldman Sachs is excited about Woolworths shares right now. The broker gave the grocer a coveted 'conviction buy' rating, complete with a 12-month share price target of $41.70.

If realised, that would give investors an upside of more than 20% from the current share price.

Goldman cites Woolworths' strong market position and digital leadership for its bullish views, predicting it can lift Woolworths' market share going forward.

Goldman is also pencilling in large dividend rises over the next couple of years. It has a forecast of $1.02 in dividends per share for FY2023, rising to $1.13 per share for FY2024.

No doubt that will be a very welcome view for Woolworths shareholders today.

At the current Woolworths share price, this ASX 200 supermarket share has a price-to-earnings (P/E) ratio of 27.4, with a dividend yield of 2.65%.

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