Although the ASX 200 index is nearing a record high, the same cannot be said for all shares on the benchmark index.
For example, the two ASX 200 shares in this article have fallen heavily from their highs and sit far nearer to their 52-week lows now.
While this is disappointing, Goldman Sachs believes it has created an opportunity for investors to buy these "fallen angels" before they recover. Here's what the broker is saying about them:
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Domino's Pizza Enterprises Ltd (ASX: DMP)
Goldman Sachs revealed that it isn't expecting a strong result from this pizza chain operator next month. In fact, it suspects that its earnings could be lower than consensus estimates. It said:
We look for 1H25 Sales/EBIT of -10.0%/-8.6%, and are -3.1% below Consensus on EBIT. We forecast group EBIT of A$99mn, just shy of 2H24 EBIT of A$100mn, and a narrowing of Japan's sales/store growth to LSD in 1H25 vs MSD in 2H24 as unit economics begin to return to previous level on recent store closures. While France/SEA could take longer, the current market price implies that Europe/Asia is trading at ~10x pre-AASB EV/EBIT, close to the acquisition multiples at which DMP initially acquired the regions.
Nevertheless, with improvements on the way and its shares trading at a discount to peers, the broker feels that now is the time to buy. Goldman adds:
The stock is trading at FY26e P/E of ~17x, below that of CKF and global QSR peers; and we expect reversion to LFL sales growth while network units stabilize and cost initiatives begin to materialize and drive re-rating.
Goldman has a buy rating and $40.20 price target on its shares.
Woolworths Group Ltd (ASX: WOW)
Another ASX 200 share that is being described as a fallen angel by the broker is supermarket giant Woolworths.
Once again, Goldman Sachs suspects that a result below consensus estimates could be coming in the first half. It said:
We look for +4.0%/-18.3% YoY sales/EBIT growth in 1H25. While this is ~9% below VA Consensus on EBIT, which we attribute to the one-off impact of DC disruption still to be fully factored in. We estimate this impact to be ~A$100mn. Excluding this gives EBIT growth of -12% YoY. From 3Q25, we see comps easing and forecast ~3% LFL sales (normalized for 53rd week last year).
Goldman feels investors should look beyond this and focus on the future. Especially with its omni-channel advantage expected to support ecommerce growth and its shares trading at a discount compared to historical averages. It adds:
With channel shift into online continuing, our recent e-Comm deep dive still suggests that WOW has the best omni-channel and digital retail capabilities amongst Australian retailers. The stock is trading at FY26e P/E of ~20x, approximately -1std below its historical average, we expect recovery in market share and cost discipline and scaling of retail media to drive recovery in AU Food EBIT margin, with trough earnings in NZ/W Living also support earnings recovery from 2H25 onwards.
Goldman has a buy rating and $36.10 price target on its shares.
