The Woolworths Group Ltd (ASX: WOW) share could be an appealing investment in the current environment. The ASX defensive share could be well positioned to ride out possible volatility, following the fallout of the US bombing Iran.
As the chart above shows, the business is down by around 5% in the last year, allowing investors to buy at a more attractive valuation.
Why the Woolworths share price could be a good buy
We all need to eat food, so there's going to be a stable level of demand in the coming years.
In the latest update from the business, being the FY25 third-quarter, total sales increased by 3.2% to $17.3 billion. Woolworths operates a number of businesses, including a food business-to-business (B2B) segment, a New Zealand food division, BIG W, PETstock and other businesses.
In those 13 weeks to 6 April 2025, Australian supermarket sales grew 3.6% to $13 billion, Australian business-to-business (B2B) sales increased 6.3%, New Zealand food rose 4.8% (in New Zealand dollar terms), W Living sales fell 2.7% to $1.2 billion and other sales rose 5.3% to $59 million. The intersegment eliminations and reclassification sales worsened 1.6% to negative $376 million.
UBS recently said in a note that Woolworths regained the lead as the primary grocery retailer across offline, reaching 39%, up from 37% at March 2025. It overtook Coles Group Ltd (ASX: COL), which fell to 35%, down from 38%, though Woolworths has 30% more stores than Coles. I think that recovery is a good thing for the Woolworths share price, which may be helped by the company's recent decision to reduce a number of product prices.
While those growth levels don't exactly shoot-the-lights-out, it is positive progress. This can help the business deliver underlying earnings growth.
Valuation
UBS forecasts Woolworths could produce $1.38 billion of net profit after tax (NPAT) in FY25 and that it could grow by 57% to FY29's estimated profit figure of $2.17 billion.
I think Woolworths' focus on providing the best online food shopping experience could be key for delivering ongoing growth and success for the business.
According to UBS, the Woolworths share price is valued at 23x FY26's estimated earnings. I think Woolworths shares are looking like an appealing defensive buy right now.
