ahh UBS, they will be seen as way too early to pull the buy...

ahh UBS, they will be seen as way too early to pull the buy call.
the competition story is still yet to play out in a significant way.
bottom of the cycle EBIT/EBITDA margins are typically 3-4% and still a way to fall...
price investment never worked for tesco in the UK and nor will it work for woollies.
Woollies biggest problem is that discounters can compete on 80% sales with 20% of the SKU's
Woollies has the overheads of stocking 80% of the SKU's that make 20% of sales - effectively woollies has diseconomies of scale as the premium product over the discounters like Aldi. No amount of "price investment" is going to win them out of a structurally weaker business model.
Add to that LIDL is making their entry soon, and Amazon too and you realise there is a long way to go before woollies looks cheap enough to buy.
Remember that many years ago when EBIT/EBITDA margins for woollies were 3-4%? That was the time when franklins, Bi-lo and a host of other discounters were around. EBIT margins only recovered when the market was consolidated - and we are a long way away from that consolidation occuring.
I think UBS is way too bullish, my view we are headed to $15 over the medium term. Any excitement over sales growth over the short-term is likely to be short lived.