WOW.AX Stock Today: Price Cuts, Profit Revival Drive Rally — February 26
WOW ASX is in focus as Woolworths cuts prices on hundreds of items while reports point to a profit revival and rising pressure on Coles. Investors in WOW.AX are weighing whether price investment can protect share without eroding margins. The latest read places the share price near A$31.54 after strong multi‑month gains, with momentum stretched. We break down price action, valuation, grocery inflation in Australia, and near‑term catalysts so local investors can decide what to do today.
WOW ASX today: price, trend, and momentum
WOW ASX sits around A$31.54, within today’s A$31.28 to A$31.72 range. The 52‑week range is A$25.51 to A$35.63. Price trades above the 50‑day A$30.37 and 200‑day A$29.83 averages. Volume is 2.31m versus a 2.40m average. Performance remains firm at +27.48% over 3 months and +21.07% YTD, reflecting improving sentiment.
RSI at 83.89 flags overbought conditions, while ADX at 47.44 confirms a strong trend. MACD is positive (0.65 vs 0.50 signal) and the Bollinger upper band sits at A$33.71, with the middle band near A$31.72. ATR of 0.71 suggests a typical daily swing of about 2%. Momentum supports the uptrend, but overbought readings increase pullback risk.
Traders will watch the Bollinger middle band near A$31.72 as a pivot. Initial support sits around A$31.00 and the 50‑day average at A$30.37. On strength, the upper band near A$33.71 is resistance, with the 52‑week high at A$35.63 above that. Holding above moving averages keeps the short‑term bias positive.
Price cuts and grocery inflation in Australia
Woolworths has cut prices on hundreds of items as inflation persists, aiming to drive traffic and loyalty while easing cost‑of‑living pain for households. The move targets volume gains and market share defence, according to local coverage VIDEO: Woolworths cuts prices. Execution and duration of these cuts will shape basket size and mix over the next quarter.
Grocery inflation Australia remains sticky, so lower shelf prices risk margin squeeze. Current metrics show a 25.4% gross margin, 2.77% operating margin, and 1.39% net margin TTM. WOW ASX must offset price investment with mix, supplier terms, and cost control. Watch quarterly gross margin and promotional intensity for early signals on profitability.
Reports of a profit revival have lifted sentiment and increased pressure on Coles. Price perception, fresh quality, and availability remain the battlegrounds. If Woolworths sustains sharper pricing without heavy dilution, it can widen the gap. If rivals match aggressively, the industry may lean on cost discipline and private label growth to protect earnings.
Earnings, costs, and fundamentals to watch
Earlier in the year, staff underpayment costs wiped A$485m from first‑half net profit, weighing on sentiment. Coverage now points to improving trends as operations stabilise and growth resumes ‘Starting to turn’: Woolies gain. Investors should track remediation updates and ongoing compliance costs alongside sales recovery.
At a 45.7x PE and 8.95x PB, valuation prices in stability. EV/EBITDA is 11.59. Dividend yield is about 2.36%, but the payout ratio is 172% TTM, which limits flexibility. Leverage is elevated with debt‑to‑equity at 3.58 and interest coverage 2.28x. The current ratio of 0.57 signals tight liquidity, though the cash conversion cycle is efficient at −7.3 days.
Next earnings are due on 26 August 2026. We will watch like‑for‑like sales, gross margin trajectory, shrink, supply chain costs, and price investment magnitude. Free cash flow yield sits near 4.65% TTM, which helps fund dividends. Any improvement in working capital and interest cover would support a more sustainable payout profile.
Outlook for investors in WOW ASX
Our stock grade is B with a HOLD suggestion, while a separate company rating on 25 Feb shows B‑ with a Sell bias due to valuation and leverage. Internal forecasts point to A$29.95 monthly, A$31.19 quarterly, and A$25.53 over one year, with longer‑term projections easing further. That argues for disciplined entries and realistic return expectations.
Long‑term holders may focus on income stability, store productivity, and the inflation path. Traders can lean on A$31.00 to A$30.37 as support and A$33.71 as resistance, using tight risk controls given an RSI above 80. If price fades toward the 50‑day average, watch buyer response before adding exposure.
Final Thoughts
For WOW ASX, the setup blends strong momentum with clear valuation and margin risks. Price cuts should support traffic and loyalty, but they must be balanced by mix, supplier terms, and cost control to protect slim margins. With a 45x PE, 2.36% yield, and elevated leverage, upside depends on steady comps and stable gross margins. Traders should respect overbought signals and key levels around the 50‑day average. Long‑term investors can stay patient, watch August results, and prioritise quality of earnings and cash conversion. Selective buys on pullbacks with strict position sizing look prudent while we assess the durability of the profit revival.
FAQs
Is WOW ASX a buy after the announced price cuts?
It depends on your horizon. Price cuts can lift traffic but may squeeze margins. Valuation is rich at about 45x PE, with a 2.36% yield and elevated leverage. If you are long term, consider adding on dips. Short‑term traders may wait for a pullback from overbought levels.
How could price cuts affect Woolworths earnings?
Lower prices can grow volumes and defend market share, but they pressure gross margin if not offset by mix, supplier rebates, or cost savings. Watch quarterly gross margin, like‑for‑like sales, and basket size. Sustained traffic gains with stable margins would be a positive earnings signal.
What technical levels matter for the Woolworths share price?
Key supports are near A$31.00 and the 50‑day average at A$30.37. Resistance sits around the Bollinger upper band near A$33.71, with the 52‑week high at A$35.63 above. Momentum is overbought, so pullbacks to moving averages can offer better risk‑reward entries.
When is the next Woolworths earnings date?
The next scheduled earnings announcement is on 26 August 2026. Ahead of that, focus on updates about price investment, supplier terms, and cost inflation. We will also watch sales trends, gross margin, and any commentary on competition and compliance‑related costs.
Disclaimer:
The content shared by Meyka AI PTY LTD is solely for research and informational purposes. Meyka is not a financial advisory service, and the information provided should not be considered investment or trading advice.