Do leading brokers rate Woolworths shares as a buy following its results?

Woolworths Group Ltd (ASX: WOW) shares are under pressure on Thursday.

In afternoon trade, the supermarket giant's shares are down 3% to $38.96.

Is this a buying opportunity for investors? Let's see what two leading brokers are saying about the company following its results release this week.

What are brokers saying?

Bell Potter was pleased with the company's performance in FY 2026, noting that its net profit was ahead of expectations. It said:

WOW reported a FY26 underlying NPAT ahead of our expectations at $1,599m (BPe $1,511m and VA $1,553m). Key operating statistics of the result included: Operating results: Revenue of $71,539m was up +4% YoY (vs. BPe $71,431m and VA of $71,628m). EBITDA of $6,089m was up +7% YOY (vs. BPe of $6,123m and VA of $6,133m). Underlying NPAT of $1,599m was up +15% YOY (vs. BPe of $1,511m and VA of $1,553m). Group gross margin was up +12bps YoY and CODB was down -13bps YoY.

In response to the result and outlook commentary, the broker has made a material increase to its near-term estimates. It revealed that "NPAT changes are +16% in FY27e and +12% in FY28e."

This has led to Bell Potter increasing its price target on Woolworths shares to $42.35 (from $35.50).

However, with potential upside now just under 9%, that isn't quite enough for a buy rating, and the broker has held firm with its hold recommendation. It commented:

There has been a clear acceleration in the topline of the Australian food business in recent quarters (>200bp outperformance since 2Q26) and material recovery in the Big W business driving a return to growth at WOW. Continued growth in eCommerce sales in the Australian Food business (>17% in penetration in 4Q26), A material uplift in digital platform traffic (+13% YoY in 4Q26) and growth in active rewards members (to 10.8m users) are all encouraging signals for investments in online capability and customer capture. In the near term, WOW should also benefit from reduced supply chain implementation costs ($113m expense in FY26).

What else are brokers saying?

The team at Morgans is a little more positive on Woolworths shares. Following a review of the results, the broker has retained its accumulate rating (between buy and hold) with an improved price target of $43.50. This implies potential upside of almost 12% for investors over the next 12 months.

Commenting on its recommendation, Morgans said:

WOW's FY26 result was slightly better than expected. Australian Food earnings were in line with our forecast, while Australian B2B and W Living exceeded expectations. NZ Food was softer following a challenging 2H26. Encouragingly, Australian Food sales momentum has continued into early FY27, supported by the popular Disney Ooshies collectibles campaign. 

Excluding this benefit, sales growth remained solid, indicating the underlying business continues to perform well. We adjust FY27/28/29F underlying EBIT by +2%/+2%+4%. Our target price increases to $43.50 (from $37.30), reflecting changes to earnings forecasts and a higher valuation multiple. The multiple expansion reflects continued positive momentum in the core Australian Food segment, our increased confidence that this sales growth can be sustained, and improved execution. We maintain our ACCUMULATE rating.

The post Do leading brokers rate Woolworths shares as a buy following its results? appeared first on The Motley Fool Australia.

Motley Fool contributor James Mickleboro has positions in Walt Disney and Woolworths Group. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Walt Disney. The Motley Fool Australia has recommended Walt Disney. 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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