Morningstar

Coles Group Ltd COL

Morningstar Rating
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Stock XASX Rating as of
A$17.82 0.01 (0.03%)
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As of Delayed Price Open

Company Report

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Coles Earnings: Supermarkets Successfully Curb Theft

Johannes Faul

We lift our fair value estimate on no-moat Coles by 3% to AUD 15.50, mostly reflecting the time value of money. Net profit after tax of AUD 1.1 billion comfortably beat our estimate by 5%. However, our earnings forecasts are largely unchanged. A challenging liquor retailing environment and higher interest expenses offset a slightly improved near-term outlook on supermarket earnings. We trim our fiscal 2025 and 2026 NPAT estimates by 3% and 1%, respectively.

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Price vs Fair Value

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COL is trading at a 694% premium.
Price
A$17.82
Fair Value
A$91.30
Uncertainty
Low
1-Star Price
A$26.22
5-Star Price
A$45.50
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Coles' market-leading position and difficult-to-replicate store network are competitive advantages over smaller existing competitors and any new entrants.

Bears

Coles could face significant loss of market share to Woolworths, new entrants like Amazon Fresh, or to existing competitors with higher sales growth rates like Aldi and Costco.

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News

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Trading Information

Previous Close Price
A$17.82
Day Range
A$17.77–17.87
52-Week Range
A$14.82–19.40
Bid/Ask
A$17.81 / A$17.82
Market Cap
A$23.86 Bil
Volume/Avg
495,360 / 2.4 Mil

Key Statistics

Price/Earnings (Normalized)
19.11
Price/Sales
0.55
Dividend Yield (Trailing)
3.82%
Dividend Yield (Forward)
3.59%
Total Yield
3.98%

Company Profile

Coles is one of Australia's largest retailers, operating the second-largest supermarket chain behind market leader Woolworths, and is the country's third-largest liquor retailer. The group has an extensive store network of over 1,800 stores and roughly 80% of Australian live within a 10-minute drive from a Coles store. The retailer employs some 120,000 people, who process 17 million individual customer transactions a week. This compares with Woolworths serving about 30 million customers per week from Australia's population of 25 million.
Sector
Consumer Defensive
Industry
Grocery Stores
Stock Style Box
Large Core
Total Number of Employees
—
Website
https://www.colesgroup.com.au

Competitors

Valuation

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Metric
COL
KR
WOW
Price/Earnings (Normalized)
 19.1112.0922.88
Price/Book Value
 6.583.237.45
Price/Sales
 0.550.270.59
Price/Cash Flow
 8.545.619.23
Price/Earnings
COL
KR
WOW

Financial Strength

Metric
COL
KR
WOW
Quick Ratio
 0.170.370.19
Current Ratio
 0.590.870.55
Interest Coverage
 4.659.951.08
Quick Ratio
COL
KR
WOW

Profitability

Metric
COL
KR
WOW
Return on Assets (Normalized)
 6.10%—5.10%
Return on Equity (Normalized)
 33.43%—30.32%
Return on Invested Capital (Normalized)
 11.40%—7.66%
Return on Assets
COL
KR
WOW

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