Street View: Brokerages cut Coles PT; industry faces challenges and uncertain outlook

Colonial SFL SOCIMI SA

31/10/2024 23:06

** Australian supermarket operator Coles  COL.AX  posted a
slowdown in comparable sales in first quarter due to lower shelf
prices for its products
    ** Coles, which operates with market leader Woolworths
 WOW.AX , along with its bigger rival, have been under pressure
to cut prices of its products
    ** COL dropped 0.6% on Thursday and is up 9.2% YTD
     
UNCERTAIN OUTLOOK AMID NUMBER OF CHALLENGES
    ** Analysts at J.P. Morgan cut PT on Coles to A$17 from
A$17.59, adding that co is not immune to margin pressure the
industry faces due to promotional intensity
    ** Brokerage Bell Potter cuts PT to A$20.5 from A$21.55,
reflecting lower price growth assumptions while awaiting a
potential legal liability due to ACCC court proceedings
    ** Jefferies trims PT to A$18 from A$18.5, says political
and media scrutiny has made Australian retailing market more
competitive leading to price investment and driving customers
towards promotions
    ** Morningstar says COL shares are overvalued at the moment,
adds COL facing same near-term cost pressures as Woolworths


 (Reporting by Rishav Chatterjee in Bengaluru)
 ((Rishav.Chatterjee@thomsonreuters.com))