'Dominant': What are brokers saying about the Woolworths share price?

The Woolworths Group Ltd (ASX: WOW) share price has run out of steam on Thursday.

In morning trade, the retail giant's shares are down 1% to $37.12.

Is the Woolworths share price weakness a buying opportunity?

Three brokers that are likely to see today's pullback as a buying opportunity are Citi, Goldman Sachs, and Morgans. That's because all three have responded very positively to the company's FY 2023 results.

Morgans even saw enough in the result to upgrade its shares to an add rating with an improved price target of $41.30. While the broker doesn't necessarily think that Woolworths shares are cheap, it feels they warrant a premium valuation. It explains:

WOW's FY23 result was slightly above our expectations but in line with consensus. […] Our target price rises to $41.30 and we upgrade our rating to Add (from Hold). While WOW is not cheap, trading on 24.5x FY24F PE and 3.0% yield, we think its fundamentals remain strong with defensive characteristics, dominant market positions, and a highly-regarded management team.

Over at Goldman Sachs, its analysts have reiterated their conviction buy rating with a trimmed price target of $42. The broker believes the company is well-positioned to continue winning market share from rivals. It said:

Reiterate Buy (on CL) on high quality sales growth, and GPM expansion with well managed CODB. We believe that WOW's further advanced omni-channel and digital strategy will drive both above market sales and profit growth relative to peers.

Goldman also highlights that the Woolworths share price trades on lower-than-average multiples despite its premium valuation. It explains:

The stock is trading below its historical average (since 2018), and we see this as a value entry level for a high-quality and defensive stock.

Finally, over at Citi, its analysts have responded to the result by retaining their buy rating with a $42.20 price target.

Based on the above price targets, this implies that the Woolworths share price could rise 11% to 14% over the next 12 months.