Is the Woolworths share price too good to pass on?

The supermarket chain has had a shocker this month. So is it time to pounce?

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It's been a rough reporting season for supermarket giant Woolworths Group Ltd (ASX: WOW).

First its chief executive Brad Banducci angrily walked out of an interview on national television — then came back.

Then last week the company reported a whopping half-year loss after significant items of $781 million, which was 192.4% up year-on-year.

Oh, and Banducci announced he was quitting.

It probably doesn't surprise you that the Woolworths share price has dived more than 8.3% since last Wednesday.

So is this the perfect opportunity to buy a famous S&P/ASX 200 Index (ASX: XJO) stock that represents the largest employer in Australia?

Woolworths losing lots of friends

The recent chaos has done Woolworths no favours among professional investors.

Immediately after Banducci's exit and the half-year report, they lined up to downgrade their stock expectations.

UBS Group AG (SWX: UBSG) and Morgans both changed their recommendations from buy to neutral. Jefferies, Barenjoey, Goldman Sachs Group Inc (NYSE: GS), Citigroup Inc (NYSE: C), Macquarie Group Ltd (ASX: MQG), Morgans, and Jarden all cut their targets for the Woolworths share price.

So, on face value, those who invest for a living clearly don't think Woolworths is a bargain buy right now.

After all, more tough times are ahead of the company with government-initiated price gouging enquiries about to put a microscope on the relationships it has with suppliers and customers.

Inflation-driven cost-of-living pressures have called into question the social licence that grocery providers operate under. This will put an enormous public focus on Banducci's successor Amanda Bardwell to shift profits down in her priorities for the business.

This, of course, is not great news for investors.

So the answer to the question posed in the headline?

No, the Woolworths share price probably can be passed on at the moment. 

Later, when the environment has improved for the supermarket, the stock price might be a tad higher. But investors will have more certainty — i.e. reduced risk — about the direction of the company.

So hold your fire, and watch this space.

Citigroup is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor Tony Yoo has positions in Macquarie Group. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group and Macquarie Group. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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