Coles share price: first-half results preview

We examine some of the key things investors should know before Coles (ASX: COL) reports its first-half results to the market next week.

When will Coles report their H1 results?

Coles Group (ASX: COL) is expected to report its H1 results to the market next week, on 19 February.

Coles share price: fundamentals in focus

Potentially suggesting that the current ‘supermarket wars’ – waged between Coles and Woolworths is heating up – analysts have a relatively flat outlook for the stock’s top and bottom-line growth figures in FY20.

Specifically, analysts are currently expecting that Coles will report FY20 revenues of $36,039 million – against earnings (EBITDA) of $1,979 million.

This represents a slight slump from the year prior, where Coles reported full-year revenues of $38,464 million and earnings (EBITDA) of $2,143 million.

Importantly, with the upcoming release of the supermarket's first-half results, investors and analysts will be able to get a better sense of how the company is tracking against the above expectations.

A recent Market Update from the company filled out some of those details, with it being noted that 'the success of the [Coles] Christmas campaign exceeded expectations with Supermarkets delivering comparable sales growth of 3.6% in the second quarter and 2.0% for the first half.'

It was further noted that:

'Comparable sales growth in Liquor and Express [...] were 2.1% and 5.1% respective for the second quarter and 1.5% and 2.9% respectively for the first half.'

'Coles' provisional first half FY20 Group EBIT [...] is expected to be between $710 million and $730 million,' the company also said.

Interestingly, though the Coles (ASX: COL) share price has risen ~40% in the last year, the company trades at a valuation relatively in-line with historical market averages, at 15.9x FY19 earnings, according to the ASX.

Do you own Coles shares? You can hedge your downside risk by trading CFDs now.

The analyst outlook

Valuations aside, the current analyst outlook may suggest that the stock has run somewhat ahead of its fair value.

According to Bloomberg Data, Coles (ASX: COL) currently has 2 buy recommendations, 6 hold recommendations and 7 sell recommendations, against an average 12-month price target of $15.74.

At Coles’ current $16.980 share price, the above price target, if accurate, implies downside potential of around 7%.

The stock trended down almost a full percentage point today, even as the broader market rose ~30 points.

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

Please see important Research Disclaimer.

Seize a share opportunity today

Go long or short on thousands of international stocks.

  • Increase your market exposure with leverage
  • Get spreads from just 0.1% on major global shares
  • Trade CFDs straight into order books with direct market access

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
liveprices.javascriptrequired
liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Monday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.