Why this supermarket is outperforming the Woolworths (ASX:WOW) share price lately

This supermarket is almost tripling the Woolies share price over the last month.
The post Why this supermarket is outperforming the Woolworths (ASX:WOW) share price lately appeared first on The Motley Fool Australia. –

While the Woolworths Group Ltd (ASX: WOW) share price is having a decent run over the last month — up 2.26% in a month, there’s another ASX supermarket that’s rocketing above it, and even the Coles Group Ltd (ASX: COL) share price.

Those are the shares of Metcash Limited (ASX: MTS). The IGA, Foodland, Mitre 10, and Cellarbrations brand owner is up 5.83% over the last 30 days. That’s higher than Woolworths and Coles, the latter up 5.32% in a month. For context, the S&P/ASX 200 Index (ASX: XJO) is 0.39% lower during that time.

Let’s take a closer look.

Why this company is outperforming the Woolworths share price?

As Motley Fool has previously reported, expert opinion is pessimistic on the Woolworths share price.

Credit Suisse has a sell on the company with a price target of around $31. That suggests the broker believes that Woolworths shares are going to drop by more than 20% over the next 12 months. It thinks it’s overvalued for its expected earnings and potential (limited) growth. Several others also have the company at ‘hold’ – valuing its shares at about $40.

Metcash, meanwhile, is the stock to buy – at least according to some brokers.

UBS currently rates Metcash shares as a buy, with a price target of $4.60. A change of consumer habits appears to have helped the business including higher levels of local shopping. Some of these changes could be permanent.

The broker believes Metcash could pay a grossed-up dividend yield of 6.5% in FY22.

What else is affecting Woolworths?

This month, Woolworths was in the sights of the Australian Parliament, specifically about the pay and working conditions of its delivery drivers, including its partnership with Uber Eats.

Last Monday, Australian Labor Senator Tony Sheldon accused Woolworths of turning a blind eye to the conditions to which Uber Eats delivery employees are subject. Correspondingly, Senator Sheldon purported that the multibillion-dollar ASX-listed company is neglecting its responsible sourcing standards in the process.

This news may have been a drag on the Woolworths share price as its shares were down on the same day.

Woolworths share price snapshot

Over the past 12 months, the Woolworths share price has increased 15.77%. Year-to-date, shares in the company are up 16%. Its 52-week high is $44.06 and its 52-week low is $35.96.

Woolworths Group has a market capitalisation of approximately $48 billion.

The post Why this supermarket is outperforming the Woolworths (ASX:WOW) share price lately appeared first on The Motley Fool Australia.

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More reading

Woolworths (ASX:WOW) share price edges lower following share buy-back completion

Own Woolworths (ASX:WOW) shares? Here’s how the retail giant is using AI to combat self-serve cheats

Own Woolworths (ASX:WOW) shares? Here’s why the company is making news this week

Can the Woolworths (ASX:WOW) share price hit $45 by the end of 2021?

Why this expert reckons the Woolworths (ASX:WOW) share price is on special

Motley Fool contributor Marc Sidarous has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended COLESGROUP DEF SET. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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