Can Coles shares deliver 8% upside AND tasty dividends in 2023?

The Coles Group Ltd (ASX: COL) share price could be in for a good run in the near future, as could the supermarket operator’s dividends.

That’s despite the stock already having posted an 8% gain in 2023. After ending last year at $16.72, the Coles share price has leapt to trade at $18.02 today.

For comparison, the S&P/ASX 200 Index (ASX: XJO) has risen around 5% since the end of 2022.

So, what might bolster the supermarket stock and its dividends this year? Let’s take a look.

Invested in Coles shares? You could be in for a good year

Broker Morgans is among those bullish on the Coles share price. It tips the stock could outperform in what looks to be a rough year for others.

Many experts are forecasting the impacts of interest rate hikes, implemented in an effort to control inflation, to catch up in 2023. That could see consumer demand softening.

Fortunately, Coles’ defensive characteristics could put it on the front foot, the broker says, as my Fool colleague James reports.

It also likes the look of the company’s balance sheet and thinks it could benefit from the unwinding of local shopping.

It’s likely no surprise then, that Morgans has a $19.50 price target on Coles shares. That represents a potential 8.2% upside.

And that’s not all. It also forecasts Coles’ dividends to grow to 64 cents per share this financial year and 66 cents per share next financial year.

For comparison, the supermarket operator offered investors 63 cents per share in financial year 2022.

Citi is even more bullish on the ASX 200 constituent’s dividends, James reported last month.

The broker predicts Coles will offer 72 cents per share this fiscal year and 77 cents per share next. It also tipped the stock to rise 4.9% to $18.90.

However, not all experts are so hopeful. Goldman Sachs has a sell rating and a $14.90 price target on Coles shares, representing a potential 17% downside.

The post Can Coles shares deliver 8% upside AND tasty dividends in 2023? appeared first on The Motley Fool Australia.

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Citigroup is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. 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.

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