Axfood (Buy, TP: SEK320.00) - Well positioned for growth in 2024
Q4 marked a strong end to 2023, with Willy’s continuing to outperform peers and gain grocery market share. With a still-weak Swedish consumer environment (real income back at 2013 levels), we expect Axfood to continue to outperform in 2024 given its leading price position. We reiterate our BUY and have raised our target price to SEK320 (315) on higher estimates.AxFood AB is a food retail company. Co. conducts food retail and wholesale business in Sweden. Retail business is conducted through the Willys, Hemkop and PrisXtra chains, with a total of 252 Co.-owned stores at Dec 31 2013. In addition, Co. collaborates with a number of proprietor-run stores that are tied to it through agreements, including stores in the Hemkop chain as well as stores operating under the Handlar'n, Tempo and Direkten brands. Wholesaling is conducted by Dagab and Axfood Narlivs, whose customers consist primarily of mini-markets, service stations and other convenience stores. Axfood Narlivs also operates 20 cash and carry outlets via the subsidiary, Axfood Snabbgross AB.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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