Woolworths Group Ltd (ASX:WOW) shares soared 5.32% during Tuesday's intraday trading session, marking a significant upward movement for the Australian retail giant.

The surge followed an upgrade from JPMorgan, which raised its recommendation on Woolworths to "overweight." The investment bank cited expectations that investor focus is shifting toward margin differentials rather than sales growth amid a fresh inflation cycle driven by geopolitical concerns.

JPMorgan noted that Woolworths is well-positioned to leverage its strong relationships with suppliers to generate gross margin expansion as it rolls out its Customer Offer Reset program across a broader range of categories. The firm also raised its fiscal 2027 and 2028 earnings estimates for Woolworths by 1.2% and 7.6%, respectively, while increasing its price target to AU$37.