Heavyweight supermarket COL has enjoyed a strong 2023 helped by its first-half numbers which beat consensus last month, sales came in up 4% to $21.6b while earnings (EBIT) jumped 14% to $1114m, 9% above consensus. The beat was driven by a strong supermarket outcome which saw gross margins up 43bps. Supermarkets have returned to growth since the turn of the new year, supporting a reasonable set-up to meet market expectations for the 2H helped by the easing of cost pressures in many areas of the business.
- We like COL as a business but see little upside from $18 although its forecast 3.7% fully franked yield should remain supportive into weakness.
MM is neutral towards COL around $18
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