Fact based stock research
Woolworths Holdings (JSE:WHL)

ZAE000063863

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

Woolworths Holdings stock research in summary

woolworthsholdings.co.za

ANALYSIS: With an Obermatt Combined Rank of 23 (worse than 77% compared with investment alternatives), Woolworths Holdings (Department Stores, South Africa) shares have lower financial characteristics compared with similar stocks. Shares of Woolworths Holdings are a good value (attractively priced) with a consolidated Value Rank of 59 (better than 59% of alternatives) but show below-average growth (Growth Rank of 27), and are riskily financed (Safety Rank of 43), which means above-average debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 23, is a sell recommendation based on Woolworths Holdings's financial characteristics. As the company Woolworths Holdings's key financial metrics exhibit good value (Obermatt Value Rank of 59) but low growth (Obermatt Growth Rank of 27) and risky financing practices (Obermatt Safety Rank of 43), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 59% of comparable companies, may indicate the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	59
Growth Rank	27
Safety Rank	43
Combined Rank	23

Country	South Africa
Industry	Department Stores
Index	Good Governace Growth Markets, JSE All Shares
Size class	X-Large

This stock has achievements: Top 10 Stock.

25-Apr-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

Multiple opinions. One number.

Analysts rarely agree on a stock’s future. So, who do you believe? Obermatt translates those collective views into a single Sentiment Rank. That plus the financial ranks give you the ultimate 360° View. Sign up to access them.

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Woolworths Holdings

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	37	69	43	59
GROWTH
GROWTH	36	29	51	27
SAFETY
SAFETY	19	22	43	43
SENTIMENT
SENTIMENT	n/a	35	49	^new
360° VIEW
360° VIEW	n/a	25	45	^new

Most recent update of the stock research: 25-Apr-2024. Financial reporting date used for calculating ranks: 28-Oct-2023. Stock research history is based on the Obermatt Method. The higher the rank, the better Woolworths Holdings is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	37	69	43	59
GROWTH
GROWTH	36	29	51	27
SAFETY
SAFETY	19	22	43	43
COMBINED
COMBINED	23	29	41	23

Last update of combined financial performance: 25-Apr-2024. Stock analysis on combined financial performance: The higher the rank of Woolworths Holdings the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 59 (better than 59% compared with alternatives), Woolworths Holdings shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Woolworths Holdings. Price-to-Profit (also referred to as price-earnings, P/E) is 66 which means that the stock price compared with what market professionals expect for future profits is lower than for 66% of comparable companies, indicating a good value concerning Woolworths Holdings's profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 31, which means that the stock price is lower as regards to invested capital than for 31% of comparable investments. On the other hand, Price-to-Sales is less favorable than 56% of alternatives (only 44% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than 13% of comparable companies, making the stock more expensive as regards to the company's expected dividend payouts. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 59, is a buy recommendation based on Woolworths Holdings's stock price compared with the company's operational size and dividend yields. This is a puzzling picture, because it means that profits are high while dividends are low. Since the stock price is low compared with invested capital but high in respect to expected revenues, it means that the company has more invested capital than peers for generating the same amount of revenue. Since profits are higher, it could be a "cash cow" situation (using the classic Boston Consulting BCG matrix naming convention) where the company is on a downward trend, still living from the profits of past products. As the company pays low dividends, it may harbor the opinion that a turnaround is possible, and it rather invests the cash than pay it out to shareholders, thus sealing the company's fate early. Any investment optimism should only be a buy trigger once thorough research is completed. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is especially important in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	67	69	42	44
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	74	71	52	66
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	22	39	24	31
DIVIDEND YIELD
DIVIDEND YIELD	41	71	77	87
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	37	69	43	59

Last update of Value Rank: 25-Apr-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Woolworths Holdings; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 27 (better than 27% compared with alternatives), Woolworths Holdings shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with three out of four indicators below average for Woolworths Holdings. Only Capital Growth has a good rank of 61, which means that currently professionals expect the company to grow its invested capital more than 12% of its competitors. The other three indicators are pointing South: Sales Growth has a rank of 47 which means that currently professionals expect the company to grow less than 53% of its competitors. Profit Growth with a rank of 12 and Stock Returns with a rank of 39 are also low (below 61% of alternative investments). ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 27, is a hold recommendation for growth and momentum investors. The good news from the invested capital side is surprising. A company with disappointing revenues, profits, and disappointed shareholders typically doesn't invest above average. Overall, the growth momentum for Woolworths Holdings is thus negative. As it is intriguing to see that company executives are optimistic about their investment policy, it is worthwhile looking into the details of the capital investment projects. They may indicate future growth and profits and thus if accompanied by a good value, a sign of good timing to invest in the stock. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is limited here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	21	14	44	47
PROFIT GROWTH
PROFIT GROWTH	11	14	30	12
CAPITAL GROWTH
CAPITAL GROWTH	n/a	56	44	61
STOCK RETURNS
STOCK RETURNS	73	71	71	39
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	36	29	51	27

Last update of Growth Rank: 25-Apr-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Woolworths Holdings.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 43 (better than 43% compared with alternatives), the company Woolworths Holdings has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of Woolworths Holdings is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Woolworths Holdings. Liquidity is at 63, meaning the company generates more profit to service its debt than 63% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 35, which means that the portion of the debt that is about to be refinanced is above average. It has more debt in the refinancing stage than 65% of its competitors. Leverage is also high at a rank of 30, which means that the company has an above-average debt-to-equity ratio. It has more debt than 70% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 43 (worse than 57% compared with alternatives), Woolworths Holdings has a financing structure that is riskier than that of its competitors. High Leverage (a low Obermatt Leverage Rank) is good in good times, because it usually indicates that shareholders get higher returns. The good Liquidity performance of the company is an indicator that this is the case. However, if you expect an economic downturn, you may stay clear of this stock because they have an above-average debt level that needs refinancing soon. If the company is sailing with good winds, as may be visible from the Growth and Sentiment performance, the refinancing risk may be lower than the low Refinancing rank suggests. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	25	10	30	30
REFINANCING
REFINANCING	31	29	37	35
LIQUIDITY
LIQUIDITY	38	37	61	63
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	19	22	43	43

Last update of Safety Rank: 25-Apr-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Woolworths Holdings and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	5	19	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	50	17	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	99	83	^new
MARKET PULSE
MARKET PULSE	n/a	18	58	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	35	49	^new

Last update of Sentiment Rank: 25-Apr-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Woolworths Holdings.
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