Australia’s Foodland supermarket chain continues its fairytale share price story with new all time highs being set weekly.
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The share price hit A$15.82 (US$8.11) last week, up from about A$13 at the start of February and A$10.82 last July. Three weeks ago the West Australia-based company revealed a near 30% jump in second quarter sales, which has helped push the share price towards the A$15 barrier.
This strong performance has encouraged many analysts to rerate Foodland with Macquarie Equities tipping a full year net profit of A$90.6m, upgraded from A$88.4m. Credit Suisse First Boston expects A$85.2m in 2002 and has a share price target of A$16.50.
But despite the upgrades, some analysts remain concerned that Foodland will run out of steam as the share price approaches A$16. They believe that while Foodland deserves to have its forecasts upgraded it is still not as strong as its massive rivals Woolworths and Coles Meyer.
For that reason the market expects Foodland’s heady rise in value to taper out heading into 2003.
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By GlobalDataBy David Robertson, just-food.com correspondent
