COL – Credit Suisse rates the stock as Outperform

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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).

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