The company has undertaken an exclusive partnership with UK-based online retail group Ocado. This is expected to double the company’s home-delivery capacity and improve online margins.
Macquarie assesses the announcement as a positive development after a difficult period for Coles following the weak convenience trading update. The partnership follows recent trends in supermarkets globally.
Macquarie welcomes the partnership, given the change in shopping habits, but considers actual competitive gains remain to be seen. Neutral rating maintained. Target is $12.19.
Sector: Food & Staples Retailing.
Target price is $12.19.Current Price is $11.96. Difference: $0.23 – (brackets indicate current price is over target). If COL meets the Macquarie target it will return approximately 2% (excluding dividends, fees and charges – negative figures indicate an expected loss).
