Should you buy Coles and Mineral Resources shares this month?

Are these blue chips buys? Let's see what Bell Potter is saying about them.

| More on:
A man looking at his laptop and thinking.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Coles Group Ltd (ASX: COL) and Mineral Resources Ltd (ASX: MIN) shares are very different companies.

One is a supermarket giant, the other is a mining and mining services company.

But one thing they do share in common is a buy rating from the team at Bell Potter.

Let's see what the broker is saying about these two large cap ASX 200 shares.

What is the broker saying about Coles shares?

Bell Potter notes that Coles released its quarterly update this week. And while its key supermarket business fell a touch short of the broker's expectations, it is growing quicker than the market. It said:

Revenue growth of +3.5% YOY to $9,507m, which is modestly below our $9,572m forecast and largely driven by price growth of +1.5% YOY in the quarter vs. our +2.0% forecast and ABS inflation of +3.3% YOY in the quarter. At a high-level COL has modestly outperformed ABS supermarkets growth in the quarter (at +3.2%).

Although the broker has trimmed its earnings estimates slightly, it remains positive. So much so, it has reaffirmed its buy rating on Coles shares with a slightly lowered price target of $20.50. This implies potential upside of 16.5% for investors from current levels.

Commenting on its recommendation, Bell Potter said:

Our Buy rating is unchanged. We see FY25e as a year of consolidation on a reported basis, however, we continue to see COL as providing an attractive earnings growth profile through to FY27e on an underlying basis driven by: (1) delivering $1Bn in cumulative savings by FY27e through Simplify & Save ($238m of which was delivered in FY24) (2) Sustained benefit of lower loss rates (+44bp margin tailwind YOY in 2H24); (3) Delivering targeted returns on a ~$1.45Bn capital investment program in ADC's and CFC's; and (4) Expansion of the store network at a pace consistent with population growth.

Mineral Resources

Another note reveals that the broker was relatively pleased with Mineral Resources' quarterly update, noting that "production in line with our estimates and guidance."

In response, the broker has retained its buy rating with a trimmed price target of $62.00. This suggests that upside of almost 60% is possible between now and this time next year.

Commenting on its buy recommendation, the broker said:

MIN continues to make good progress on its critical tasks of commissioning the Onslow Iron Project and deleveraging its balance sheet. We forecast that Onslow will become a foundational earnings driver for MIN from FY26. MIN still has numerous options to enhance its balance sheet, and we think more transactions are likely, going forward, eliminating market leverage concerns.

The Boards governance announcement (4 November) stands out as critical near-term catalyst for MIN. Looking forward 12-months, we think that process will be complete, MIN will continue to be a sector leader in agile operations and business development, and accordingly we maintain our buy recommendation.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Coles Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Blue Chip Shares

A bearded man holds both arms up diagonally and points with his index fingers to the sky with a thrilled look on his face over these rising Tassal share price
Blue Chip Shares

Up 47% in a year: This blue chip ASX 200 stock can keep rising

Bell Potter is feeling bullish about this stock. But why?

Read more »

Happy man working on his laptop.
Blue Chip Shares

These big ASX 200 blue chip shares could rise 20% to 50%

Analysts think these blue chips could be cheap at current levels.

Read more »

A man holding a cup of coffee puts his thumb up and smiles while at laptop.
Blue Chip Shares

Why this ASX 200 share is one of the 'highest-quality names'

Goldman Sachs is a huge fan of this blue chip. But why?

Read more »

A fit man flexes his muscles, indicating a positive share price movement on the ASX market
Blue Chip Shares

4 ASX 200 blue chip shares to buy for a strong portfolio

Looking for strong shares to buy? Here are four that analysts rate as buys.

Read more »

Cheerful boyfriend showing mobile phone to girlfriend in dining room. They are spending leisure time together at home and planning their financial future.
Blue Chip Shares

2 ASX shares I think are a safe buy in October

Analysts think these strong blue chip shares are top buys for investors right now.

Read more »

Hand holding Australian dollar (AUD) bills, symbolising ex dividend day. Passive income.
Blue Chip Shares

Top Australian stocks to buy with $3,000 right now

Brokers think these shares would be great destinations for an investment.

Read more »

Group of successful real estate agents standing in building and looking at tablet.
Blue Chip Shares

2 of the best blue chip ASX 200 shares to own for the long term

Bell Potter rates these high-quality stocks very highly. But why? Let's find out.

Read more »

A kangaroo stands on a sandy beach with vivid white sand and blue sea in the background
Blue Chip Shares

3 stocks Australians can buy and hold for the next decade

Analysts think these could be some of the best shares to buy on the local market.

Read more »