Coles is set for a significant first half, Credit Suisse observes. Sales momentum has been strong and gross margins appear to benefit from lower promotional intensity. Pandemic-related costs have been lower relative to expectations.
Credit Suisse assesses supermarket sales are likely to re-accelerate in November and December amid more in-home celebrations relative to the prior corresponding festive season. Supermarket sales are up 9.7% in the year to date.
Outperform rating retained. Target is raised to $21.04 from $20.16.
Sector: Food & Staples Retailing.
Target price is $21.04.Current Price is $17.85. Difference: $3.19 – (brackets indicate current price is over target). If COL meets the Credit Suisse target it will return approximately 15% (excluding dividends, fees and charges – negative figures indicate an expected loss).