Coles Group's 1H sales and earnings are tracking according to Ord Minnett's virtually unchanged FY24 forecasts. The target rises to $15 from $14.50 solely due to the time value of money.

The company's 1H earnings (EBIT) margin declined by -30bps on the previous corresponding period to 4.8% due to supermarket theft, rising wage costs and expenses incurred on logistics and online fulfillment projects, explains the analyst.

Ord Minnett believes the market is underplaying the risk to relatively low-growth, defensive yield stocks like Coles and Woolworths Group ((WOW)) in the current high interest rate environment.

A fully franked interim dividend of 36cps was declared.

The Lighten rating remains for Coles Group.

Sector: Food & Staples Retailing.

Target price is $15.00.Current Price is $17.05. Difference: ($2.05) - (brackets indicate current price is over target). If COL meets the Ord Minnett target it will return approximately -14% (excluding dividends, fees and charges - negative figures indicate an expected loss).

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