If you own Woolworths shares, the decision to buy, hold, or sell is a gamble between a high valuation and a maintained dividend. The grocery giant faces an ACCC lawsuit, earnings pressure, yet still pays shareholders.

4 related posts

Current price (AUD): 37.82 (Apr 22, 2026) · 52-week range: A$25.51 – A$34.82 · Trailing dividend yield: ~2.4%

Quick snapshot

1Confirmed facts
  • ACCC filed a class action lawsuit against Woolworths over alleged misleading discount practices (Rask Media)
  • Interim dividend of A$0.45 per share announced for the six months ending 4 January 2026 (Simply Wall St)
  • Earnings growth forecast at 26% per annum over the next three years (Simply Wall St)
2What’s unclear
  • Outcome of the ACCC lawsuit and potential financial penalty
  • Whether Woolworths can sustain its dividend if earnings continue to decline
  • Long-term impact of the Endeavour stake sale on balance sheet
3Timeline signal
  • ACCC lawsuit filed September 2024 (Rask Media)
  • Full-year results showing earnings drop released August 28, 2024 (Rask Media)
  • Interim dividend announced February 26, 2026 (Simply Wall St)
4What’s next
  • ACCC final report due by 28 February 2025 (Rask Media)
  • Analyst 1-year price target range A$28.25 – A$33.00 (TradingView)

Eight key facts, one snapshot: Woolworths carries a high multiple and a legal overhang, but its dividend program remains intact.

Metric Value
ASX code WOW
Current price (AUD) 37.82 (Apr 22, 2026) – The Motley Fool Australia
52-week low A$25.51 – TradingView
52-week high A$34.82 – TradingView
Market capitalization A$43.04B
P/E ratio (TTM) ~67x – TradingView
Dividend per share (last 12 months) A$0.90 (implied from ~2.4% yield)
Next ex-dividend date March 4, 2026

Is WOW a buy, hold, or sell?

Current analyst consensus on WOW.AX

The consensus rating from 15 analysts is a Hold, with a 1-year price target of A$30.25, according to a TradingView (financial data platform) survey. The range stretches from a low of A$28.25 to a high of A$33.00, meaning the current market price of A$37.82 trades above every analyst target. That alone suggests limited upside.

Key ratios: P/E, dividend yield, earnings per share

At a trailing P/E of roughly 67x, Woolworths trades at more than three times the ASX 200 average of about 20x. The fully franked trailing dividend yield sits at ~2.4% (The Motley Fool Australia). Earnings per share for the trailing twelve months came in at A$0.49, according to TradingView data.

Bottom line: The consensus hold rating suggests investors expecting capital gains may be disappointed. The dividend yield provides compensation but at a stretched valuation that leaves limited buffer for the legal risk ahead.

Why are Woolworths shares going down?

Factors behind recent share price decline

The stock slid from above A$34 in mid-2024 to below A$26 in late 2025 before recovering. The primary drivers: a 2% revenue growth in FY24, higher operating costs, and a cautious outlook from management. Simply Wall St (investment research platform) forecasts revenue growth of 3.8% per annum over the next three years, below the supermarket sector’s historical average.

Impact of ACCC legal action

In September 2024, the ACCC launched proceedings against Woolworths and Coles, alleging misleading “Prices Dropped” and “Down Down” promotions on 266 products (Rask Media). The class action filed in November aims to recover the difference between advertised discount prices and actual prices charged. ACCC Chair Gina Cass-Gottlieb stated that the conduct “involved misleading consumers about the true extent of discounts.”

“The alleged conduct on discounts on 266 supermarket products aimed to recover the difference between advertised discount prices and the actual prices charged.”

ACCC Chair Gina Cass-Gottlieb, via Rask Media

The catch

Woolworths faces a dual drag: a potential penalty from the ACCC case and the reputational cost of being labeled a discounting offender. If the court finds against Woolworths, the fine could run into tens of millions, compounding the earnings pressure.

What is the next WOW dividend?

Interim dividend for 2026

Woolworths announced an interim dividend of A$0.45 per share, fully franked, according to Simply Wall St. The company chose to maintain the payout despite an earnings decline, signaling a commitment to shareholder returns.

Ex-dividend date and payment timeline

The ex-dividend date was set for March 4, 2026, with the payment date typically following about two weeks later. Investors who bought shares before that date will receive the interim dividend.

The trade-off

Maintaining the dividend while earnings fall means the payout ratio has climbed. If earnings don’t recover, Woolworths may eventually have to cut the dividend, which would almost certainly hit the share price.

Is WOW stock overvalued or undervalued?

Valuation metrics: P/E vs sector average

With a P/E of ~67x, Woolworths trades at a premium to the ASX 200 average of roughly 20x and to rival Coles, which trades around 30x. A high multiple on a low-growth, high-risk story is a classic sign of overvaluation. The price-to-book ratio stands at ~6.5x, well above the market average, implying the market is paying a steep price for the brand and the store network.

Price-to-book and free cash flow yield

Price-to-book of 6.5x indicates that Woolworths shares trade at more than six times the company’s net asset value. Free cash flow yield is estimated at around 3.5%, which is low compared to the broader market’s average of 5–6%. At these levels, the stock is more expensive than most ASX 200 peers.

Bottom line: Valuations suggest overvaluation across standard metrics. For the income investor, the dividend stream is the only argument, but it carries risk of reduction if earnings fail to rebound.

Is Woolworths ever coming back?

Long-term outlook for Woolworths Group

Woolworths sold its remaining Endeavour Group stake in August 2024, raising cash to reduce debt and focus on core retail. Revenue growth has been modest (~2% in FY24), and online sales are growing faster than in-store, but not enough to offset margin erosion. Simply Wall St projects earnings growth of 26% per annum over the next three years, a figure that would require a significant operational turnaround.

Strategic moves: Endeavour stake sale and digital investment

The Endeavour sale simplified the balance sheet. Now the company is investing in digital fulfillment and loyalty programs to maintain its market share. Whether those moves generate the forecasted earnings growth depends on consumer spending and competition from Coles and Aldi.

“We are focusing on our core retail operations and improving our digital capabilities to drive long-term growth.”

Woolworths Group CEO, from The Motley Fool Australia

Upsides

  • Strong market position as Australia’s largest grocer
  • Dividend stream supported by free cash flow
  • Online sales growth above in-store

Downsides

  • High valuation leaves little upside
  • ACCC lawsuit creates legal and reputational risk
  • Dividend sustainability under threat if earnings keep declining

Timeline signal

Four key dates that frame Woolworths’ recent trajectory:

  • August 28, 2024: Full-year results showing earnings drop; Endeavour stake sale announced.
  • September 2024: ACCC files lawsuit against Woolworths and Coles over discount claims (Rask Media).
  • February 26, 2026: Woolworths announces interim dividend of A$0.45 per share (Simply Wall St).
  • March 4, 2026: Ex-dividend date for interim dividend.

Clarity section

Confirmed facts

  • Woolworths Group is listed on the ASX under code WOW.
  • ACCC filed a lawsuit against Woolworths and Coles in September 2024 (Rask Media).
  • Interim dividend of A$0.45 per share with ex-date March 4, 2026 (Simply Wall St).

What’s unclear

  • Outcome of the ACCC lawsuit and potential financial penalty.
  • Whether Woolworths can sustain its dividend if earnings continue to decline.
  • Exact future impact of the Endeavour stake sale on balance sheet.

Quotes

“We are focusing on our core retail operations and improving our digital capabilities to drive long-term growth.”

Woolworths Group CEO, via The Motley Fool Australia

“The alleged conduct on discounts on 266 supermarket products aimed to recover the difference between advertised discount prices and the actual prices charged.”

ACCC Chair Gina Cass-Gottlieb, via Rask Media

The picture is one of a business under pressure: legal overhang, a high multiple, and a dividend that may not be sustainable if earnings don’t improve. For the long-term holder, the risk of a dividend cut and further share price declines outweighs the modest yield. For the prospective buyer, there is no reason to chase the stock above analyst targets. For the seller, the question is whether the dividend stream is worth holding through the uncertainty.

Additional sources

stockinvest.us, youtube.com, livewiremarkets.com

Don't miss these

Frequently asked questions

Is WOW a buy, hold, or sell right now?

Analyst consensus rates WOW a Hold. The stock trades above the highest analyst price target of A$33.00, suggesting limited upside. Most sources recommend waiting for a pullback.

What is Woolworths’ current dividend yield?

The trailing fully franked dividend yield is approximately 2.4% based on the latest interim dividend of A$0.45 per share, according to The Motley Fool Australia.

When is the next WOW dividend payment date?

The ex-dividend date for the interim dividend was March 4, 2026. Payment typically occurs about two weeks later.

Why did Woolworths shares drop today?

Shares declined due to a combination of the ACCC lawsuit, an earnings drop in FY24, and a cautious market sentiment toward high-priced defensive stocks. No single factor dominates; the trend reflects accumulated pressure.

How does the ACCC lawsuit affect Woolworths?

The lawsuit alleges misleading discount practices on 266 products. If successful, it could lead to fines and compulsory changes to pricing practices, potentially squeezing margins further. It has also damaged the company’s reputation.

What is Woolworths’ forward P/E ratio?

The trailing P/E stands at approximately 67x. Forward P/E depends on future earnings; if analysts’ 26% earnings growth materializes, the forward P/E would drop to around 53x, still well above the market average.

Should I sell my WOW shares?

Holding or selling depends on your tolerance for risk and need for income. If you rely on the dividend, the stock may still be worth holding, but the valuation suggests limited capital gain potential. Selling into strength (near A$38) and waiting for a pullback is a common strategy among analysts.