Supermarket giants Coles Group Ltd (ASX: COL) and Woolworths Group Ltd (ASX: WOW) shares are often seen as reliable S&P/ASX 200 Index (ASX: XJO) picks.
Both companies are part of the consumer staples sector.
With three out of four big four banks projecting no further interest rate cuts for the remainder of 2025, investors may be looking for ASX 200 stocks that can do well in any interest rate environment.
Consumer staples companies typically see relatively stable demand across the cycle.
Coles shares have done particularly well this year, rising 23% in 2025 while currently offering a dividend yield of nearly 3%.
However, after such a strong share price performance, JP Morgan Chase & Co (NYSE: JPM) has a neutral rating on the stock and a price target of $21.80. Given that Coles shares closed at $23.28 yesterday, this suggests they will decline over the next 12 months.
On the other hand, Woolworths shares have fallen 14% in 2025. Following this decline, are they attractively valued according to JP Morgan? Let's find out.
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Are Woolworths shares good value today?
On 28 August, JP Morgan released a new research note covering its FY25 results and trading update.
JP Morgan focused on the supermarket's eight-week trading update and FY26 earnings outlook, which came in well below consensus expectations.
The broker noted that Woolworths grew sales 2.1% for the first 8 weeks of FY26. This is significantly behind Coles, which increased sales by 4.9% over the same period.
On the post result investor call, Woolworths management acknowledged they were unhappy with their performance relative to Coles.
Following the result, JP Morgan downgraded its price target on Woolworths shares from $31 to $29.60.
Justifying this valuation, JP Morgan said:
Woolworths is still facing a challenging outlook, with recent operational mishaps pushing the retailer to cede share to both Coles and Aldi as well as elevated cost pressures driven by higher than expected FY26 minimum wage growth. The $400m cost-out program is expected to be used to offset both sales and earnings headwinds as the retailer continues on with the portfolio review. Management is likely to pursue a gross margin focused strategy to offset operating deleverage. Market share losses to Aldi are also starting to moderate as value for shoppers becomes less important against an easing cost of living backdrop.
Yesterday, Woolworths shares closed at $26.21. This suggests Woolworths shares could increase 13% over the next 12 months.
In addition to this return, Woolworths also offers a dividend yield of 3.22%.
Therefore, based on current share prices and JP Morgan's price targets, Woolworths shares are more attractively valued today than Coles.
