You are considering investing in Woolworths (ASX: WOW)

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You are considering investing in Woolworths (ASX: WOW). You will need to make an investment recommendation based on the market and your theoretical value of Woolworths. This question is designed such that your answers in this question should build a company and industry profile of Woolworths and help make your final recommendation. Any assumptions that you rely upon should be clearly stated in your answer.

i) Undertake an industry and company analysis for Woolworths. This question asks you to consider the factors which influence Woolworths’s share price. (15 Marks). 

ii) What is the current price (any date from March 2020) of ordinary common shares of Woolworths (ASX: WOW)? Using an appropriate chart as reference, describe how this price has evolved over the past 3-years, and compare the performance of Woolworths to an appropriate benchmark index (15 Marks). 

iii) What has been the main driver(s) or influences Woolworths’s share price movement over the past 6 months? What do you think will impact the share price in the future? Make reference to the analysis you took in i and ii) (5 Marks).

iv) Valuation multiples are often used to compare companies quickly. Identify an appropriate valuation multiple/ratio and evaluate if the company is over or under valued using relative valuation. What are the reasons you picked the multiples that you did and how did you conclude that Woolworths is over or under valued? (5 marks).