Insights

What to expect from the Coles Q1 update this week

The Coles Group Ltd (ASX:COL) share price will be on watch this week. Here’s what to expect when it hands in its Q1 update…
The post What to expect from the Coles Q1 update this week appeared first on Motley Fool Australia. –

Coles share price

On Wednesday all eyes will be on the Coles Group Ltd (ASX: COL) share price when the supermarket giant hands in its highly anticipated first quarter update.

Ahead of the update, I thought I would take a look to see what was expected from Coles.

What is expected from Coles in the first quarter?

According to a note out of Goldman Sachs, its analysts are expecting Coles to deliver a 7% increase in comparable supermarket sales during the first quarter.

This is expected to result in supermarket sales of $8,263 million. It expects this to be driven partly by the Little Treehouse promotion but largely by the stronger demand environment.

The company’s Liquor business is expected to have performed very strongly during the quarter. Goldman is forecasting comparable store sales growth of 10% for the quarter, leading to total Liquor sales of $804 million.

Finally, the broker has pencilled in first quarter Convenience sales of $298 million, up 12.9% on the prior corresponding period.

Overall, will mean a 7.7% increase in total first quarter sales to $9,365 million.

What else should you look out for?

Goldman Sachs believes Coles has been busy opening new stores during the three months.

It is expecting the company to report 9 net new supermarkets and 15 liquor stores to have been opened during the quarter.

And while it is unlikely that management will provide guidance for the remainder of the year, Goldman revealed that it has lifted its full year forecasts for FY 2021.

It now expects revenue of $38,663.9 million and earnings before interest, tax, depreciation and amortisation (EBITDA) of $3,398.3 million. This represents year on year growth of 3.4% and 4.4%, respectively.

Should you invest?

Based on Goldman Sachs’ estimates, Coles shares are currently changing hands for just under 29x FY 2021 earnings.

While this isn’t cheap, I still think it is decent value for a company with such positive long term growth potential, defensive qualities, and a generous dividend yield.

Incidentally, Goldman has a buy rating and $20.40 price target on the company’s shares.

Man who said buy Kogan shares at $3.63 says buy these 3 ASX stocks now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

In this FREE STOCK REPORT, Scott just revealed what he believes are the 3 ASX stocks for the post COVID world that investors should buy right now while they still can. These stocks are trading at dirt-cheap prices and Scott thinks these could really go gangbusters as we move into ‘the new normal’.

Find out the names of our 3 Post COVID Stocks – For FREE!

*Returns as of 6/8/2020

More reading

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of COLESGROUP DEF SET. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post What to expect from the Coles Q1 update this week appeared first on Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!