“Coles (COL) first quarter 2024 sales update overall was slightly weaker than anticipated,” Raymond said.
“Supermarkets like-for-like (LFL) sales growth was broadly in line with our expectations, but Liquor was softer.
“Management said sales growth in both divisions in early second quarter 2024 was broadly in line with the first quarter 2024.
“We make minimal changes to earnings forecasts.
“Our target price moves down marginally to $16.60 (from $16.90 previously).
“With a forecast 12-month total shareholder return (TSR) of 15%, we upgrade our rating to Add. “COL is now trading on 20.1x financial year 2024F PE and 4.4% yield.
“With management taking steps to reduce total loss and supply chain investments on track with expectations in August, we think the stock is looking more attractive following the recent pullback in the share price,” Raymond said.
Coles (COL) – since demerger
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