Collins Foods Ltd

CKF: XASX (AUS)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	A$89.50	Wmzjh	Rhmrgzmjr

Collins Foods: Market Underappreciating Potential for Margin Recovery

Johannes Faul

May 31, 2024

Discretionary retail stocks had a strong finish to 2023 as the market ran ahead with visions of a consumer rebound on rate and tax cuts. But that narrative has been undermined by sticky inflation. Caught up in the pessimism weighing on consumer cyclicals, shares in no-moat Collins Foods have fallen 20% year-to-date. But we think the sell off is unwarranted. Collins looks significantly undervalued when set against our unchanged fair value estimate of AUD 14.40.

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