Woolworths Group (ASX:WOW) shares advanced 4% in recent Tuesday trade after JPMorgan raised its recommendation on the company to "overweight," the Australian Financial Review reported the same day.

In a note, JPMorgan reportedly said investor focus is shifting toward margin differentials as opposed to sales growth amid a fresh inflation cycle driven by geopolitical concerns.

"We expect Woolworths to once again leverage its strong position with suppliers to generate gross margin expansion as it rolls out its Customer Offer Reset program across a broader range of categories," the report quoted JPMorgan as saying.

The investment 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, according to the report.

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