Woolworths results preview

Woolworths Holdings is set to release FY18 results on the 23rd of August 2018.

Earnings guidance

A trading statement issued by the company last month has guided that the earnings per share figure is expected to be realised between 160% and 170% lower than the previous financial year. Headline Earnings per share are expected to be realised 15% to 20% lower than the previous financial year.

The substantial drop in earnings is said to be attributable to the David Jones transformation initiative. Margins and costs have been negatively affected by the repositioning of the foods business, the implementation of new online systems and inventory, as well as the head office relocation.  

Woolworths 20082018

Average Broker Ratings (Institutional View)

The average broker rating for Woolies (from a poll of twelve brokers surveyed by Thompsons Reuters) is hold. The long term price target (12 month), as gauged by a median of analyst estimates is considered at 6360c.

Client sentiment WW 20082018

IG Client Positioning (Retail trader View)

Woolworths remains popular amongst IG clients with 93% of traders holding the stock (as of Monday the 20th of August) expecting the price to rise over the near term. 50% of trading activity in the last week amongst IG clients have been buys, while 57% of the last months trading activity on the stock has also been on the sell side.

Technical View

Trading view WW 20082018

The daily price chart of Woolworths shows the long term price trend to be firmly down.  In the short term however there is a consolidation underway between the 4875 and 5250 levels. For faith in a renewed uptrend (at least in the near term) a break of the 5250 level is needed, failing which traders might consider maintaining a short bias to trades in line with the longer term downtrend. A break of the 4875 level would consider the continuation of the short term downtrend in line with the longer term trend.

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This information has been prepared by IG, a trading name of IG Markets Limited and IG Markets South Africa Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. International accounts are offered by IG Markets Limited in the UK (FCA Number 195355), a juristic representative of IG Markets South Africa Limited (FSP No 41393). South African residents are required to obtain the necessary tax clearance certificates in line with their foreign investment allowance and may not use credit or debit cards to fund their international account.

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