21% in a year: Have Coles shares become too expensive?

Brokers give their verdict on Coles for 2025.

| More on:
A photo of a young couple who are purchasing fruits and vegetables at a market shop.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

By all accounts, it has been a great year to own Coles Group Ltd (ASX: COL) shares in 2024. Coles has had one of its best years in a long time this year. The ASX 200 supermarket giant started January at $16.11 a share. But today, those same shares are going for $19.03 each.

This means that Coles investors have seen their shares grow by 18.2% over 2024 to date. 

Coles has also grown by an even more impressive 21% over the past 12 months, given that the company was trading at just $15.74 a share this time last year.

Check that all out for yourself below:

Created with Highcharts 11.4.3Coles Group PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.com.au

But that's not where the good times end. Coles investors have also enjoyed some meaningful dividend income over the past 12 months. The company has paid out an annual total of 68 cents per share in fully-franked dividends this year, a healthy rise over the 66 cents investors enjoyed in 2023.

This would have resulted in someone who bought Coles shares a year ago enjoying a dividend yield of 4.32% over 2024.

So that's all well and good for Coles shareholders. But does this company remain a buy today for new and existing investors?

Are Coles shares still a buy at $19 each?

Well, at least two ASX brokers think that they are.

Last month, my Fool colleague discussed the views of broker Ord Minnet. Ord Minnet liked Coles' third-quarter update from October so much that it subsequently raised its rating on the stock from 'hold' to 'accumulate':

Coles provided a solid update for the September quarter. The company demonstrated strong execution with healthy first-quarter FY25 sales and clear cost discipline. Secondly, tightly managed capital expenditure (capex) should reward shareholders with healthy free cash flow (FCF) and dividends.

Beyond FY25, Coles has several earnings drivers in FY26, underpinning our confidence in earnings growth. The risk-reward is attractive, with Coles now trading at a 16% discount to arch-rival Woolworths (WOW).

It issued a 12-month share price target of $19.50 for Coles shares, which, if realised, would see another few percentage point gains from its current price.

Ord Minnet isn't the only broker eyeing off Coles shares though. We've also recently covered the views of its fellow ASX broker Bell Potter.

Bell Potter stated, "We continue to see COL as providing an attractive earnings growth profile through to FY27e on an underlying basis". 

This broker anticipates a rising dividend over the coming years, peaking at 86 cents per share in FY2027. Bell Potter has given Coles a 12-month share price target of $20.50.

So, ASX brokers seem fairly optimistic about Coles shares today. But let's see what happens in 2025 and beyond.

At the current Coles share price, this ASX 200 stock is trading on a price-to-earnings (P/E) ratio of 22.03, with a dividend yield of 3.6%. 

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the 'five best ASX stocks' for investors to buy right now. We believe these stocks are trading at attractive prices and Scott thinks they could be great buys right now...

See The 5 Stocks *Returns as of 30 April 2025

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Coles Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Consumer Staples & Discretionary Shares

A warehouse worker is standing next to a shelf and using a digital tablet.
Consumer Staples & Discretionary Shares

Wesfarmers share price dips amid strategy day for investors

What's ahead for this diversified conglomerate?

Read more »

A man looks a little perplexed as he holds his hand to his head as if thinking about something as he stands in the aisle of a supermarket.
Consumer Staples & Discretionary Shares

Should I buy Woolworths shares today?

Woolworths shares have gained far less than Coles shares over the past year. Is that about to change?

Read more »

A woman sits at her home computer with baby on her lap, and the winning ticket in her hand.
Consumer Staples & Discretionary Shares

Which 'enduring high-quality business' has become a forgotten ASX 200 stock?

Fundie says this ASX 200 consumer discretionary stock has been flying under investors' radar.

Read more »

A young man sitting at an outside table uses a card to pay for his online shopping.
Consumer Staples & Discretionary Shares

Why is the Kogan share price crashing 12%?

Profits are down at this ecommerce company during the second half.

Read more »

A woman looks at a tablet device while in the aisles of a hardware style store amid stacked boxes on shelves representing Bunnings and the Wesfarmers share price
Consumer Staples & Discretionary Shares

Could Wesfarmers shares hit $100 in 2025?

Wesfarmers shares have risen 113% over the last five years.

Read more »

Interest rates written on top of pictures of houses on a computer.
Share Market News

3 ASX 200 consumer discretionary stocks to benefit from a rate cut

With an RBA rate cut expected this afternoon, it could be positive news for these three stocks. 

Read more »

Picture of a Domino's pizza.
Consumer Staples & Discretionary Shares

Domino's share price slides on major leadership shakeup

Domino’s announced a big leadership change this morning.

Read more »

Couple look at a bottle of wine while trying to decide what to buy.
Consumer Staples & Discretionary Shares

Treasury Wine shares: Buy, hold, or sell? Here's Macquarie's take

What is Macquarie forecasting for Treasury Wine shares amid the CEO’s unexpected exit?

Read more »