Over the last six weeks the Coles Group Ltd (ASX: COL) share price has been amongst the best performers on the S&P/ASX 200 index.
Since the middle of March the supermarket giant's shares have rallied over 12% higher.
As a comparison, over the same period the benchmark index has carved out a gain of approximately 2.5%
Why is the Coles share price outperforming the market?
Coles shares have bounced back strongly after being sold off in the middle of February following the release of a softer than expected half year result.
The decision to pick up shares following this weakness has proven to be a good one, especially after the company backed up its share price recovery with the release of a strong third quarter sales update on Monday.
Thanks largely to the success of its 'Fresh Stikeez' promotional campaign and grocery inflation, Coles reported a 3.3% increase in total Supermarket and Liquor sales to $8,007 million.
Is it too late to buy Coles shares?
I don't believe it is too late to invest and feel the company's shares are still trading at an attractive level.
I'm not alone in thinking this way. According to a note out of Goldman Sachs this morning, it has retained its buy rating and $13.30 price target on the company's shares following the release of the "stronger than expected" third quarter sales result.
This price target implies potential upside of over 5.5% excluding dividends over the next 12 months or 10.5% including them.
The broker said: "Coles has been delivering to its strategy script from June 2018 while also compensating for its under-investment since its demerger from WES in November 2018. We believe that Coles is poised for greater profitability from its online strategy and supply chain investments and is also undervalued in relation to its closest peers."
I agree with this view and would sooner buy Coles shares ahead of rival Woolworths Group Ltd (ASX: WOW) and even Metcash Limited (ASX: MTS).
