Stock Tips: The supermarket duopoly still looks pretty fresh this week
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It’s no easy gig analysing share prices and company performance but somebody’s got to do it. Every week two experts from our Stock Tips columnist pool give us their recommendations.
Jed Richards – Shaw and Partners
BUY
Woolworths delivered solid FY25 results with resilient earnings and strong sustainability initiatives. The result were below expectations, and the share price is low. Strategic restructure should improve operational focus. Defensive characteristics and stable cash flows make WOW a reliable anchor for balanced portfolios amid economic uncertainty.
Block’s diversified fintech ecosystem – Square, Cash App, Afterpay – continues to scale globally. Despite short-term volatility, its innovation in digital payments and financial services supports long-term growth. Recent ticker change reflects brand consolidation. Attractive entry point for growth exposure.
HOLD
BHP’s FY25 results showed solid operational performance and strategic investment in copper and potash. However, weaker iron ore prices reduced earnings. Long-term decarbonisation and electrification themes remain supportive. Hold for income and resource exposure, but be aware of commodity price risks.
WiseTech’s FY25 earnings showed strong revenue and profit growth, supported by global logistics software demand. However, valuation remains elevated and recent acquisitions add integration risk. Hold for tech exposure with global reach.
SELL
Despite strong historical performance, Goodman’s valuation looks stretched amid rising bond yields and slowing industrial property momentum. FY25 results showed EPS growth, but macro headwinds may pressure future returns. Consider trimming exposure and rotating into more attractively priced property assets.
ResMed’s Q4 FY25 results were solid, but we are concerned over competitive pressures and margin compression. Despite innovation and acquisitions, the current share price and leadership changes suggest caution. Sell to reallocate toward more stable healthcare or income-generating assets.
Chris Haynes – Equity Trustees
BUY
The global biopharmaceutical company’s stock has significantly retraced over the past two years and now trades at a discount relative to the broader market. Despite a solid recent earnings result, the share price declined, presenting a compelling long-term entry point. The outlook for its core product, IVIG, remains robust, and CSL continues to lead in this space. This represents a high-quality, long-term investment opportunity.
RWC designs and manufactures water flow and control products for the plumbing industry, with a strong presence in the US market. Its performance is closely tied to US housing starts, which have been subdued due to elevated mortgage rates (~7%). With expectations of rate cuts ahead, housing activity should improve, providing a tailwind for RWC. The stock has pulled back to attractive levels, offering a favourable risk-reward setup.
HOLD
Under new leadership, Coles has delivered strong margin expansion and revenue growth. The recent result was impressive, and its logistics and fulfilment investments are nearing completion, with benefits expected to flow through in FY2026. The stock has performed well, and while the outlook remains positive, it may be time for a pause.
Nine Entertainment Company (ASX:NEC)
Nine’s share price has appreciated following the sale of Domain Group and now appears fairly valued. While the business remains solid, further upside may be limited at current levels.
SELL
Wesfarmers is a diversified conglomerate with operations across retail, industrials, and healthcare. While exceptionally well-managed, the stock is trading at a stretched valuation – currently around 37x forward earnings. This pricing implies perfection and leaves little room for error. A de-rating is likely, making it prudent to take profits.
Xero provides cloud-based accounting and business solutions for SMEs. While the company has executed well, integration risks around its newly acquired payments business introduce uncertainty. At current levels, the stock appears expensive given the execution risk and elevated valuation.
The views, information, or opinions expressed in the interviews in this article are solely those of the interviewees and do not represent the views of Stockhead.
Stockhead does not provide, endorse or otherwise assume responsibility for any financial advice contained in this article.
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