Macquarie reviews its outlook for Coles Group ahead of the strategy briefing on June 17. The broker envisages upside from normalising consumer behaviour with comparable sales narrowing.
The stock screens attractively on valuation and the broker switches its preference to staples, upgrading to Outperform from Neutral.
Coles is expected to be a beneficiary from the unwinding of the “local shopping” trend. Coles supermarkets are over-indexed to shopping centres and the CBD, areas most affected by the pandemic. Target is raised to $18.20 from $17.30.
Sector: Food & Staples Retailing.
Target price is $18.20.Current Price is $16.96. Difference: $1.24 – (brackets indicate current price is over target). If COL meets the Macquarie target it will return approximately 7% (excluding dividends, fees and charges – negative figures indicate an expected loss).