Woolworths Group Ltd (ASX: WOW) shares were in the spotlight on Thursday when the retail giant released its quarterly update.

The company's shares ended the session around 1.5% higher at $31.94 after investors responded positively to the release.

This latest gain means that the supermarket operator's shares are now up 8% since this time last month.

Does this mean they have peaked or can they keep rising? Let's find out what analysts are saying.

Are Woolworths shares a buy?

According to a note out of Goldman Sachs, its analysts were pleased with the company's performance during the third quarter. They said:

WOW reported largely in-line 3Q25 sales results, with AU Foods total sales +3.6%, above ABS Supermarket retail sales +1.7% Jan/Feb 2025 and largely in-line with key competitor COL Foods. We deem the key sales drivers as high quality, and implies positively on in-quarter AU Foods profitability with a return to positive store originated sales growth, growth in eComm pick-up (higher margin vs delivery) and strong Cartology growth.

The good news is that Goldman believes that this bodes well for its performance in FY 2026 and is forecasting strong earnings growth next year. It adds:

Looking into FY26, we continue to expect strong recovery in both group sales +4% and group EBIT +20%, supported by AU Foods sales +4.7% and EBIT +15% as WOW recovers lost share in 1H26 and the elimination of one-off costs (1H25 ~A$95mn EBIT from industrial action and 2H25 ~A$20-25mn from QLD stock-losses). We retain our drop-through of ~A$150mn of the ~A$400mn productivity program to AU Foods EBIT. We are also seeing green shoots of NZ turnaround and expect Big W 2H26 profit to reduce EBIT loss vs 2H25 due to reduced seasonal stock-clearance, though Big W remains a broader strategic question.

In light of the above, Goldman Sachs has retained its buy rating with a slightly improved price target of $36.50.

Based on its current share price of $31.94, this implies potential upside of 14% for investors over the next 12 months.

In addition, the broker is forecasting fully franked dividend yields of 2.6% in FY 2025 and then 3.4% in FY 2026.

What else is being said?

Elsewhere, Macquarie Group Ltd (ASX: MQG) remains positive on Woolworths shares. This morning, it has retained its outperform rating with a $33.60 price target. It said:

Retain Outperform. We expect earnings to bottom in FY25E, with significant growth in FY26E as the group cycles a disrupted year, and cost savings to benefit FY27E+.