Goldman Sachs upgrade for COL

Coles Group Ltd (ASX: COL)

This leading supermarket operator has been a very positive performer this year. Due to the pandemic, Coles has experienced a surge in demand from consumers, leading to a notable jump in sales and profits.

For example, in FY 2020 the company reported a 6.9% increase in sales to $37.4 billion and a 7.1% lift in net profit after tax to $951 million. Pleasingly, this strong growth accelerated in the first quarter of FY 2021 despite easing COVID restrictions. For the three months ended 30 September, Coles delivered a 10.5% increase in total sales over the prior corresponding period to $9.6 billion.

This was stronger than expected, with analysts at Goldman Sachs predicting first quarter growth of 7.7%. In light of this, the broker retained its buy rating and lifted the price target on the company’s shares to $20.50. The Coles share price is currently trading at $17.94.