Woolworths Holdings (WHL.JO)

Consumer · JSE · South Africa

R47.92-8.71% today

Fundamentals

Market capR43.34B

P/E ratio25.7

Dividend yield4.80%

Revenue growth (YoY)+5.2%

Profit margin2.1%

Return on equity15.7%

52-week rangeR47.00 to R61.46

Valuation and ratings

DCF fair valueR19.72

Upside to fair value-58.8%

Analyst target (mean)R59.33

Analyst rangeR53.00 to R64.00

Analysts covering8

Consensus viewbuy

Moat score41/100

Overall rating24/100, Sell

Woolworths Holdings trades at R47.92, which is 59% above the R19.72 our discounted cash flow model puts on the business. On that measure it screens as expensive, which is not the same as saying it will fall.

Our moat model scores it 41 out of 100, which is little in the way of a moat. A moat is a structural reason competitors cannot take the profits away, and it matters more to a long holding period than any single quarter's numbers do.

It changes hands at 25.7 times earnings. Be careful reading that in isolation: for a cyclical business a low P/E arrives at the top of the cycle, when profits are peaking and about to fall, which is exactly when the shares look cheapest and are not.

About Woolworths Holdings

Woolworths Holdings Limited, through its subsidiaries, operates a chain of retail stores in South Africa, Australia, and New Zealand. It operates through seven segments: Woolworths Fashion, Beauty and Home; Woolworths Food; Woolworths Logistics; Country Road Group; Woolworths Financial Services; and Treasury. The company provides food, clothing, homeware, beauty, and other lifestyle products. It offers financial products and services, such as store cards, credit cards, personal loans, and other financial products. In addition, the company is involved in the cash and debt management activities. Woolworths Holdings Limited was incorporated in 1929 and is based in Cape Town, South Africa.

Industry: Department StoresEmployees: 37,714HQ: South Africa

WHL.JO passes 3 of our 30 screens today

Each screen prints the exact criteria it used, and the circumstances in which it is wrong.

Consumer staples

The companies that sell what people buy regardless of the economy. Dull, and dull is the entire point.

South Africa and the JSE

A commodity and currency market wearing an equity market's clothes. The index can rise on a good day in Beijing.

Dividend aristocrats

Companies with long, unbroken records of raising their dividend. The record is the point: it is evidence, not a promise.

Common questions

Is Woolworths Holdings (WHL.JO) undervalued?

Against our discounted cash flow estimate of R19.72, WHL.JO at R47.92 is 59% above fair value. That is one model's answer, not a recommendation, and most of a DCF's output sits in a terminal value nobody can forecast.

What is WHL.JO's P/E ratio?

WHL.JO trades at 25.7 times earnings. A low P/E is not automatically cheap: on a cyclical company it is usually a warning that earnings are at a peak.

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Data from company filings, exchange quotes and SEC EDGAR 13F disclosures. Quotes are delayed. Metrics we do not have are left out rather than estimated. Educational information, not financial advice.