Coles Group performed ahead of expectations in the March quarter and Credit Suisse expects further improvement as consumers return to major centres. The broker believes the business is well-positioned for the rising cost of living, with its “value” network differentiation and high penetration of the Coles brand.
Inflation is accelerating. Yet, with increased media coverage of the cost-of-living pressures the broker suspects there is less room for margin expansion than the market may be anticipating. Neutral maintained. Target rises to $18.81 from $18.32.
Sector: Food & Staples Retailing.
Target price is $18.81.Current Price is $18.47. Difference: $0.34 – (brackets indicate current price is over target). If COL meets the Credit Suisse target it will return approximately 2% (excluding dividends, fees and charges – negative figures indicate an expected loss).
