Coles Group Limited (ASX:COL) Released Earnings Last Week And Analysts Lifted Their Price Target To AU$20.31

Last week saw the newest half-yearly earnings release from Coles Group Limited (ASX:COL), an important milestone in the company's journey to build a stronger business. Results were roughly in line with estimates, with revenues of AU$23b and statutory earnings per share of AU$0.83. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Coles Group

Taking into account the latest results, Coles Group's 15 analysts currently expect revenues in 2025 to be AU$44.3b, approximately in line with the last 12 months. Statutory per share are forecast to be AU$0.82, approximately in line with the last 12 months. In the lead-up to this report, the analysts had been modelling revenues of AU$44.1b and earnings per share (EPS) of AU$0.82 in 2025. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

The consensus price target rose 6.9% to AU$20.31despite there being no meaningful change to earnings estimates. It could be that the analystsare reflecting the predictability of Coles Group's earnings by assigning a price premium. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Coles Group, with the most bullish analyst valuing it at AU$23.60 and the most bearish at AU$15.50 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that revenue is expected to reverse, with a forecast 0.8% annualised decline to the end of 2025. That is a notable change from historical growth of 3.2% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 3.1% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Coles Group is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Coles Group's revenue is expected to perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Coles Group going out to 2027, and you can see them free on our platform here.

You still need to take note of risks, for example - Coles Group has 2 warning signs we think you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.