Risk Reward Update: Coles Group Limited | Asia Pacific

Research evidence excerpt

Risk Reward Update: Coles Group Limited | Asia Pacific

Update

July 23, 2026 09:04 AM GMT

Morgan Stanley Australia Limited+MColes Group Limited | Asia Pacific Melinda K Baxter

Equity Analyst

Risk Reward Update Melinda.Baxter@morganstanley.com +61 2 9770-1176

What’s Changed

Coles Group Limited (COL.AX) From To

Price Target A$23.90 A$25.00

Bull Case A$25.50 A$26.50

Coles Group Limited (COL.AX, COL AU)

Base Case A$23.90 A$25.00

Updated Components Australia Consumer | Australia

EPS Stock Rating Overweight

Investment Thesis Industry View Cautious

Price target A$25.00

Bull Base Bear Scenarios

Shr price, close (Jul 23, 2026) A$23.43

52-Week Range A$24.59-20.10

Risk Reward for Coles Group Limited (COL.AX) has been Fiscal Year Ending 06/25 06/26e 06/27e 06/28e

EPS (A$)** 0.82 0.92 1.00 1.03

updated Prior EPS (A$)** - 0.93 1.02 1.04

Unless otherwise noted, all metrics are based on Morgan Stanley ModelWare

Reason for change framework

** = Based on consensus methodology

e = Morgan Stanley Research estimates

We adjust estimates ahead of FY26 results. Driving average estimate downgrades of

1.3% across FY26-28e are i) cuts to our 2H26 Supermarket sales estimates,

reflecting channel check feedback that the SSSG gap between COL and WOW has

continued into 4Q ii) more protracted liquor turnaround, noting channel check

feedback suggesting industry weakness has continued, with COL margins impacted

from operating deleverage.

We increase the P/E multiple we apply to COL's FY27 earnings from 21.4x (5%

discount to WOW 23x multiple) to 23.4x (10% discount to updated WOW multiple

of 26x) reflecting positive earnings momentum in both COL and WOW, given pricing

power and consumer trade down, though the higher discount to WOW reflects

WOW's stronger topline and earnings growth from strategy reset.