Coles Group Limited (COL.AX) stock analysis

In our weekly check, Coles Group Limited is graded C (A to F). Of 25 checks on debt, profit, cash flow and trend: 15 pass, warnings: 7, red flags: 3.

About Coles Group Limited

Coles Group Limited is a Consumer Defensive company (Grocery Stores) based in Australia, listed on ASX as COL.AX.

What our checks show for COL.AX

Red flags

• Net debt is 2.4x a year of EBITDA (debt/equity 2.51). That limits room in a downturn and raises refinancing risk.
• The net margin is only 2.4%: little room if costs rise.
• The dividend takes 122% of profit: little cushion if profit falls.

Warning signs

• Operating profit covers interest only 2.6 times: a weak year could make the payments hard.
• The net margin fell by 0.3 points over 5 years, to 2.4%: the company keeps less of each sale as profit.
• Analysts expect only about 3.9% a year of growth in revenue.
• Revenue grew only 4% a year over the last 3 years.
• Earnings per share fell 1.2% a year over the last 3 years.
• Net profit fell 0.2% a year over the last 3 years.
• Free cash flow is only 4.1% of revenue.

Strengths

• The gross margin is 23.5% and has risen by 1.1 points: pricing power is holding.
• Operating cash flow is 3.07x net profit: the profit arrives as real cash.
• Analysts expect earnings per share to grow about 12.5% a year over the next years.
• A large company: market value $23.21 billion.
• Its deepest fall from a peak in the available history was 23%.
• Beta 0.27: the stock usually moves less than the market.

Similar companies

TSCO.L · AD.AS · DNP.WA · KR · WN.TO · WOW.AX

Questions

What grade does Coles Group Limited (COL.AX) have?

In our weekly check, Coles Group Limited is graded C (A to F). Of 25 checks on debt, profit, cash flow and trend: 15 pass, warnings: 7, red flags: 3. The grade is a risk check, not a buy or sell recommendation.

What are the main risks of COL.AX stock?

This week's biggest flags for Coles Group Limited: High debt, Thin margins, Dividend stretched. In total 10 of 25 checks show a warning or a red flag.

What does Coles Group Limited do?

Coles Group Limited is a Consumer Defensive company (Grocery Stores) based in Australia, listed on ASX as COL.AX.

The grade is a risk check, not a price forecast, and not investment advice. In our 10-year test (S&P 500, 2016-2026), stocks we graded A or B fell more than 30% 2-3 times less often than D or F, without a lower average return.

Updated 2026-10-24

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