Woolworths Group Ltd (ASX: WOW) shares have been strong performers in 2023.
Since the start of the year, the retail giant's shares have risen approximately 13%.
This compares favourably to a gain of almost 4% for the S&P/ASX 200 Index (ASX: XJO) over the same period.
Can Woolworths shares keep rising?
The good news for investors is that it may not be too late to snap up Woolworths' shares.
For example, according to a recent note out of Citi, its analysts have a buy rating and a $42.20 price target on the company's shares.
Based on the current Woolworths share price of $38.07, this implies a potential upside of 10.8% over the next 12 months.
Citi believes that Woolworths could outperform expectations thanks to strong momentum in the key Australian Food segment. It explains:
We continue to see upside to consensus for Australian Food sales, with excellent momentum in 4Q23 carrying through to the trading update. GP margins can increase further given the growth in new businesses such as Cartology.
Is anyone else bullish?
Analysts at Goldman Sachs are also feeling very positive on Woolworths. They currently have a buy rating and a $42 price target on the company's shares.
Goldman believes Woolworths can continue to win market share thanks to high levels of consumer stickiness and loyalty, as well as its omnichannel advantage. The broker explains:
We are Buy rated (on Conviction List) on the stock as we believe the business has among the highest consumer stickiness and loyalty among peers, and hence has strong ability to drive market share gains via its omni-channel advantage, as well as pass through any cost inflation to protect its margins, beyond market expectations. The stock is trading below its historical average (since 2018), and we see this as a value entry level for a high-quality and defensive stock.
All in all, these brokers appear to believe the retail giant could be a top option for investors looking for exposure to this side of the market.
