BUZZ-JPM cautious on Woolworths and Coles amid regulatory and political headwinds

Reuters04-29

** J.P. Morgan analysts cut price targets on Australian supermarket operators Woolworths and Coles

** Lower PT on COL to A$15.4 from A$16.2 and on WOW to A$33.5 from A$34.8

** COL shares down 1.3% at A$16.2, while WOW up 0.4% at A$31.7

** Earnings impacts of recent senate inquiry into Woolworths and Coles difficult to estimate at this stage - J.P. Morgan analysts

** JPM downgrades earnings estimates for both companies, lowers WOW FY24 estimates by 2.1% and that of COL by 1.5%

** Brokerage sees prospects for smaller industry-wide changes due to the inquiry, which could put a lid on gross margins and store growths

** Says prospects of changes could drive earnings risks from FY26 for both WOW and COL

** Expects combination of mandatory Code of Conduct, and outcomes from Australian Competition and Consumer Commission review to drive changes in industry - JPM

(Reporting by Rishav Chatterjee in Bengaluru)

((Rishav.Chatterjee@thomsonreuters.com;))

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