At an investor day, Coles Group outlined increased investment in areas such as data, eCommerce, technology, automation, range, stores and sustainability. Management also noted the normalisation in consumer behaviour seen in early 4Q21 has continued (ex-Victoria).
The broker expects the group to continue to benefit from a normalisation in consumer behaviour. While increased investment will be negative for near-term earnings, it’s estimated the longer-term benefits should be positive.
The Add rating is maintained and the target is decreased to $17.80 from $18.50.
Sector: Food & Staples Retailing.
Target price is $17.80.Current Price is $16.29. Difference: $1.51 – (brackets indicate current price is over target). If COL meets the Morgans target it will return approximately 8% (excluding dividends, fees and charges – negative figures indicate an expected loss).
