COL – Morgan Stanley rates the stock as Downgrade to Underweight from Equal-weight

By Broker News | More Articles by Broker News

Morgan Stanley observes supermarket industry margins have re-based and this has paid off for the major operators. The broker believes execution will be a differentiator in supermarkets in 2020 and Woolworths has a margin advantage, partially reflecting its scale advantage. This is considered unlikely to be eroded over the medium term.

While acknowledging a benign backdrop, the broker still struggles to find meaningful valuation upside for Coles and downgrades to Underweight from Equal-weight. Target is raised to $13.50 from $13.00. Industry view: Cautious.

Sector: Food & Staples Retailing.

Target price is $13.50.Current Price is $15.66. Difference: ($2.16) – (brackets indicate current price is over target). If COL meets the Morgan Stanley target it will return approximately -16% (excluding dividends, fees and charges – negative figures indicate an expected loss).

Broker News

About Broker News

FNArena's Australian Broker Call, is your daily news report on the latest recommendation, valuation, forecast and opinions recently published by Stockbrokers.

View more articles by Broker News →