The Coles Group Ltd (ASX: COL) share price is down 9.08% in 2021 so far on yesterday's close of $16.82 a share.
Conversely, 2021 has been very kind to the S&P/ASX 200 Index (ASX: XJO) and a whole range of ASX 200 shares so far.
ASX banks like Commonwealth Bank of Australia (ASX: CBA), ASX miners like BHP Group Ltd (ASX: BHP) and telco Telstra Corporation Ltd (ASX: TLS) shares are all double digits in the green year to date.
Yet the Coles share price is at the same level as it was back in February 2020 (just before the pandemic hit). Coles shares are also around 12% below the all-time high of $19.26 that we saw back in August last year.
So why isn't Coles joining the ASX 200 party? Good question.
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What's behind the Coles share price's lacklustre 2021 performance?
Investors have seemingly been lukewarm on Coles ever since the grocery giant delivered its half-year earnings update back on 17 February.
By the end of trading on 18 February, the Coles share price was down more than 10%.
So what spooked investors? Although Coles delivered bumps in revenue, earnings, profits and dividends, it may have been the caveat that Coles' management attached these results that got investors second guessing.
Management stated:
Depending on COVID-19, vaccine roll out and efficacy, and other factors, sales in the supermarket sector may moderate significantly or even decline in the second half of FY21 and into FY22. Coles will be cycling elevated sales from COVID-19 in Supermarkets late in the third quarter, for the remainder of the second half, and most of FY22.
Given the malaise that the Coles share price has been in ever since, it could be that investors are taking the company at its word.
Analyst tips solid growth for Coles
Despite the headwinds for the Coles share price so far in 2021, one top analyst is tipping solid growth for the company in the coming decade.
Goldman Sachs has a current buy rating on Coles and has set a $19.40 price target. It forecasts a fully franked dividend of 62 cents per share in FY 2021, increasing to 67 cents in FY 2022.
At the last Coles share price of $16.82, the company has a market capitalisation of $22.44 billion, a price-to-earings (P/E) ratio of 21.39 and a trailing dividend yield of 3.6%.
Coles is expected to post its full-year FY21 results on 18 August.
