Coles Surges While Woolies Tanks

Upgrades and target price increases for COL today. Share price up another 2.5%, backing up yesterday’s big 8.5% gain.

Numbers from COL yesterday were a slight beat. Didn’t justify such a spike, but such is the market these days – algorithms rule. The gains potentially coming from short-term price weakness and a rotation out of other defensive sectors that dumped on results day. Not even “safe and boring” grocery stores are immune from the volatility – WOW is down 13% on its results today.

Broker commentary on Coles is positive. Analysts preferring it over WOW. Superior sales growth, high customer retention, lower gearing and more efficiency gains. One even said “attractive valuation.”

There has been a 24% share price swing between COL and WOW in the last 24 hours. WOW is now actually cheaper for the first time in years.

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