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Goldman Sachs tips Coles share price to hit $14.30

The Coles Group Ltd (ASX: COL) share price climbed 3% to $14.99 on the back of its trading update, but it might have got ahead of itself if the analysts at Goldman Sachs are on the money. This morning the retailer reported total sales were up 1.8% for the quarter ending September 30 2019. Same-store supermarket sales climbed 0.1% on a comparable basis with liquor sales up 0.7%.

Goldman’s took a look at the latest numbers this afternoon and stuck to its $14.30 valuation using a sum of the parts and discounted cash flow blended valuation method.

According to the analysts key downside risks include competition, “supply chain automation delays” and the experience of the management team. Coles itself also flagged the additional pressures the drought like conditions are placing on suppliers. 

The stock has trended steadily higher since its late 2018 spin-off by investment conglomerate Wesfarmers Ltd (ASX: WES).

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