Fact based stock research
Coles Group (ASX:COL)

AU0000030678

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

Coles Group stock research in summary

colesgroup.com.au

ANALYSIS: With an Obermatt Combined Rank of 12 (worse than 88% compared with investment alternatives), Coles Group (Food Retail, Australia) shares have lower financial characteristics compared with similar stocks. Shares of Coles Group are low in value (priced high) with a consolidated Value Rank of 39 (worse than 61% of alternatives), show below-average growth (Growth Rank of 39), and are riskily financed (Safety Rank of 12), which means above-average debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 12, is a sell recommendation based on Coles Group's financial characteristics. As the company Coles Group's key financial metrics all exhibit below-average performance, such as low value (Obermatt Value Rank of 39), low growth (Obermatt Growth Rank of 39), and risky financing practices (Obermatt Safety Rank of 12), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. Such poor financial performance sometimes indicates that the company's business is all concentrated in some distant future. This is sometimes the case for high-tech or biotechnology companies. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and risky today. In such cases, the Obermatt Method has limited value as it is based on facts we can observe today. If the facts are all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that should only amount to a small fraction of a safe portfolio. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	39
Growth Rank	39
Safety Rank	12
Combined Rank	12

Country	Australia
Industry	Food Retail
Index	ASX 100, ASX 200, ASX 300, ASX 50
Size class	XX-Large

This stock has achievements: Top 10 Stock.

14-Nov-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

Multiple opinions. One number.

Analysts rarely agree on a stock’s future. So, who do you believe? Obermatt translates those collective views into a single Sentiment Rank. That plus the financial ranks give you the ultimate 360° View. Sign up to access them.

Why popular stocks have low ratings

It’s easier said than done. When your stock drops, it’s easy to want to sell it and find a better performer. Think twice, or even three times, before trading. Those fees (especially the hidden ones) can eat up your gains.

Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Coles Group

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	61	45	31	39
GROWTH
GROWTH	39	13	7	39
SAFETY
SAFETY	41	16	8	12
SENTIMENT
SENTIMENT	n/a	82	41	^new
360° VIEW
360° VIEW	n/a	23	1	^new

Most recent update of the stock research: 14-Nov-2024. Financial reporting date used for calculating ranks: 30-Jun-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Coles Group is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	61	45	31	39
GROWTH
GROWTH	39	13	7	39
SAFETY
SAFETY	41	16	8	12
COMBINED
COMBINED	44	4	1	12

Last update of combined financial performance: 14-Nov-2024. Stock analysis on combined financial performance: The higher the rank of Coles Group the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 39 (worse than 61% compared with alternatives), Coles Group shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for Coles Group. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 86% of comparable companies, making the stock an attractive buy for dividend investors. However, dividend investors may get disappointed because all other critical financial indicators are below the market median: Price-to-Sales is 48 which means that the stock price compared with what market professionals expect for future profits is higher than 52% of comparable companies, indicating a low value concerning Coles Group's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 23 which means that the stock price compared with what market professionals expect for future profit levels is higher than 77% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 14 is also low. Compared with invested capital, the stock price is higher than for 86% of comparable investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 39, is a hold recommendation based on Coles Group's stock price compared with the company's operational size and dividend yields. Should dividend investors pick Coles Group? The company-reported financials speak against it. The company is expensive compared with revenue and invested capital levels, two reliable company size indicators. In addition, it currently has a low level of profits. How can future dividends be paid in the case that profits remain low? Dividend investors should choose Coles Group only if they reasonably expect the low current profit levels to be transitory. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is essential in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	74	53	62	48
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	59	38	26	23
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	8	11	13	14
DIVIDEND YIELD
DIVIDEND YIELD	84	82	78	86
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	61	45	31	39

Last update of Value Rank: 14-Nov-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Coles Group; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 39 (better than 39% compared with alternatives), Coles Group shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Coles Group. Capital Growth has a rank of 65, which means that currently professionals expect the company to grow its invested capital more than 28% of its competitors. Investors welcomed this, visible in the Stock Returns rank of 63 (above 63% of alternative investments). But Sales Growth has only a rank of 28, which means that, currently, professionals expect the company to grow less than 72% of its competitors, and Profit Growth is also low at a rank of 28. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 39, is a hold recommendation for growth and momentum investors. This is an ambiguous picture. Revenue growth and capital growth are strong, but the growth in profit, which seems good, can also be an indication that growth momentum may be negative. The fact that stock returns have been above average doesn't help much, as stock returns are less reliable in showing a company’s future growth potential. Prices may perform well for the simple reason that investors were too pessimistic in the past and are now correcting their opinions and moving the stock price to a more reasonable level. As the growth picture is mixed for Coles Group, investors may want to look at value and sentiment indicators for a well-rounded picture of this stock. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is mixed here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	49	32	25	28
PROFIT GROWTH
PROFIT GROWTH	n/a	46	29	28
CAPITAL GROWTH
CAPITAL GROWTH	n/a	16	34	65
STOCK RETURNS
STOCK RETURNS	41	39	25	63
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	39	13	7	39

Last update of Growth Rank: 14-Nov-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Coles Group.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 12 (better than 12% compared with alternatives), the company Coles Group has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of Coles Group is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with all three metrics below average for Coles Group. Liquidity is at 27, meaning that the company generates less profit to service its debt than 73% of its competitors. This indicates that the company is on the riskier side when it comes to debt service. Even worse, Leverage is at a rank of 8, meaning the company has an above-average debt-to-equity ratio. It has more debt than 92% of its competitors. Finally, Refinancing is at a rank of 22 which means that the portion of the debt about to be refinanced is above average. It has more debt in the refinancing stage than 78% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 12 (worse than 88% compared with alternatives), Coles Group has a financing structure that is significantly riskier than that of its competitors. This combination is rather dangerous in most situations. Only very promising companies with bright future outlooks and stellar reputations can operate with such risky financing. Investors should look at Obermatt’s Value, Growth, and Sentiment Ranks to confirm a very positive outlook or be careful with investing in stocks of Coles Group because it may suffer significantly in case of future difficulties. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	44	8	8	8
REFINANCING
REFINANCING	35	22	20	22
LIQUIDITY
LIQUIDITY	51	25	23	27
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	41	16	8	12

Last update of Safety Rank: 14-Nov-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Coles Group and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	45	19	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	50	59	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	82	43	^new
MARKET PULSE
MARKET PULSE	n/a	66	72	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	82	41	^new

Last update of Sentiment Rank: 14-Nov-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Coles Group.
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