Woolworths Group Ltd (ASX: WOW) shares are pushing higher again on Wednesday as investors continue buying back into the supermarket giant.
At the time of writing, the Woolworths share price is up 1.45% to $39.30.
Earlier in the session, the ASX 200 stock climbed as high as $39.31. That puts Woolworths at a new 52-week high and around its strongest level since July 2023.
It also adds to what has already been a solid run. Woolworths shares are now up around 33% since the start of 2026.
That's a big move for a defensive supermarket stock, especially after a more difficult period for the company last year.
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Why are investors buying Woolworths shares?
With the stock sitting at a multi-year high, there hasn't been any major price-sensitive announcement from Woolworths today.
Instead, investors appear to be responding to a better run of operating updates from the business.
In its half-year results, Woolworths reported group sales growth of 3.4%, while EBIT before significant items rose 14.4%. However, statutory profit was hit by large remediation charges, which weighed on the headline result.
The company then followed that with a stronger third-quarter sales update.
For the 13 weeks to 5 April, Woolworths reported group sales growth of 4.5% to $18.1 billion. Australian Food sales rose 5.9% to $13.8 billion, while e-commerce sales remained one of the highlights of the result.
Fortunately, that seems to have helped calm some concerns after a messy period for the business.
Woolworths has been dealing with cost pressures, more cautious shoppers, competition from Coles Group Ltd (ASX: COL), and the need to rebuild trust with customers.
Cost cuts are helping
Another reason Woolworths shares have been climbing is its focus on costs.
Management has been working on a major cost-reduction program, including changes to corporate roles and support office costs. Recent reports have also pointed to plans to move hundreds of corporate jobs offshore as part of this push.
That is not great news for affected staff, of course.
But from an investor's point of view, the market appears to be looking at the potential earnings support from lower costs.
This is especially important because Woolworths is still operating in a difficult environment.
Is Woolworths getting expensive?
There's no doubt that Woolworths is still a high-quality business with defensive earnings. It has a large store network, strong brand recognition, and a growing digital business.
However, after a 33% gain this year, expectations have clearly moved higher.
Broker target data also suggests the stock may be looking stretched.
Recent notes show Macquarie has a $34 price target on Woolworths, while Bell Potter has a $35.50 target and a hold rating. Jefferies is a little lower with a $32 target.
Those targets all sit below today's share price, which suggests these brokers believe the stock has already run ahead of near-term expectations.
