The Woolworths Group Ltd (ASX: WOW) share price has soared almost 40% in the past year, as the chart below shows.
Woolworths had a solid FY26, which investors were expecting and now we're a few weeks into FY27.
We're going to look at what drove the company in FY26 and whether expert analysts think the business is undervalued.
Image source: Getty Images
Solid turnaround in FY26
The business had been losing out to Coles Group Ltd (ASX: COL) in recent times, but seemed to have turned things around in the FY26 result.
Woolworths reported in the 2026 financial year that total sales grew 3.6% to $71.5 billion, underlying operating profit (EBITDA) grew 6.7% to $6.1 billion, underlying EBIT climbed 12.7% to $3.1 billion, and underlying net profit rose 15.4% to $1.6 billion. Statutory net profit increased 18.1% to $1.1 billion.
Pleasingly, every operating division reported a rise in EBIT during FY26. Australian food grew EBIT by 8.5% to $1.95 billion, New Zealand food grew EBIT by 8.8% to NZ$163 million, the Australian business-to-business (B2B) segment grew EBIT by 13% to $155 million and the W Living division saw a $147 million improvement in EBIT from a loss to a $116 million profit.
A sizeable portion of the increase for the Australian food segment was due to the prior year having industrial action and supply chain implementation costs. Without those two elements, Australian food EBIT would have risen 4.8%, which is still solid growth.
It's also pleasing to see strong progress at New Zealand food and the Australian B2B division. The B2B segment is benefiting from improved profitability in PFD and improved cost efficiencies.
Strong outlook
FY27 started strongly for the business, with Australian food total sales increasing by 7.6% for the first eight weeks of FY27.
It said that sales momentum was further strengthened during the period by the success of its Disney Ooshies collectibles event, which Woolworths suggested added between 1.5 and 2 percentage points of additional sales growth.
New Zealand food total sales increased by 4.2% for the first eight weeks, with improved momentum compared to the fourth quarter, reflecting "some benefit" from Disney Ooshies.
However, BIG W total sales for the first eight weeks declined year over year modestly, amid cost-of-living pressures on households, particularly budget customers, and weaker trade in the everyday business.
Is the Woolworths share price a buy?
Analysts are mixed on the business – there have been 12 analyst ratings on the company in the last three months. Two of those analyst ratings were a buy, six were a hold, and four were a sell.
The average price target is $39.46, suggesting a possible rise of around 4% in the year ahead.
Therefore, analysts aren't excited by the valuation, so it could be wise to look at other ASX share ideas.
