Woolworths Group Ltd (ASX: WOW) shares are in focus today after the supermarket giant posted strong earnings results.
Woolworths shares shot 13% higher on Wednesday following its half-year earnings.
Including yesterday's gain, Woolworths shares have now climbed 37% since its 52-week low reached last October.
The company reported half-year sales of $37.14 billion, up 3.4% year-on-year.
It also reported a net profit after tax (NPAT) increase of 16.4% year-on-year to $859 million.
Earnings before interest and tax (EBIT) of $1.66 billion was up 14.4% from H1 FY 2025.
Holders of Woolworths shares would be rejoicing after what was a tough 2025.
However, prospective investors may now be wondering if they have missed the boat.
Here is the updated view from Bell Potter following yesterday's gain.
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Results at a glance
Bell Potter analysis indicates Woolworths delivered a solid 1H26 result, with underlying NPAT of $859m up 16% YoY and ahead of both Bell Potter's $845m forecast and the $816m market consensus, representing the key earnings beat.
EBITDA of $3,206m (+9% YoY) also exceeded expectations (BPe $3,127m; VA $3,173m).
Meanwhile, revenue of $37,135m (+3% YoY) was marginally below Bell Potter and consensus estimates.
Margin performance improved, with gross margin up 18bps and cost of doing business down 25bps, supported by cycling prior-period industrial action and supply chain costs.
Operating cash flow strengthened to $1,528m, capex declined to $913m, and net debt rose modestly to $5,091m.
Bell Potter said consumer confidence has strengthened in NZ following recent interest rate cuts and has weakened in Australia.
According to the report, consumer spending indicators continued to demonstrate mid-single digit YoY growth in OOH channels through 1H26. Food inflation averaged +3.2% YoY but was stronger in 2Q26 than in 1Q26.
NPAT changes are +5% in FY26e, +5% in FY27e and +3% in FY26e.
Buy recommendation unchanged for Woolworths shares
Included in the report was a price target upgrade for Woolworths shares.
Bell Potter increased its 12 month price target to $38.25 (previously $30.70).
It retained its buy recommendation.
From yesterday's closing price of $35.63, that indicates an upside of 7.35%.
The clear highlight is the pick-up in top line growth in the Australian food business, which adjusting for supply chain disruptions in the pcp returned to +3.2% YoY in 2Q26 (from +2.1% in 1Q26) and the maintenance of GM despite investing in price.
While the stock has closed the gap on its historical trading multiple, we see execution against medium term targets in the Australian and NZ Food businesses as likely to sustain a reasonable level of growth to FY28e.
