Woolworths' fresh downgrade

Wilson Asset Management

Following a disappointing third quarter trading update from Woolworths (ASX: WOW) on Wednesday, Standard & Poor’s downgraded the company’s credit rating due to weak earnings and intense competition in the market. The ratings agency lowered Woolworths’ long-term debt rating from BBB+ to BBB, although its outlook was lifted from ‘negative’ to ‘stable’ as a consequence; leaving the group just two levels above a junk rating. Shares in Woolworths soured following the announcement, and closed down 4.1% for the week. We do not own Woolworths in the investment portfolio.


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