ICA (Sell, TP: SEK370.00) - Further downside risk in 2022
Tomorrow marks one year since we initiated on ICA. Despite the share being down 11% over the past year, the valuation still looks stretched to us, and we see material downside risk in 2022. In addition, near-term we believe ICA will face growing structural headwinds from intensifying competition, market-share pressure and unfavourable price positioning, and we reiterate our SELL and SEK370 target price.ICA Gruppen is a retail group based in Sweden. Co. is engaged in maintaining and operating its own and retailer-owned stores in Sweden, Norway, Estonia, Latvia, Lithuania and Finland. Co. consists of ICA Sweden, ICA Norway and Rimi Baltic, which are mainly involved in grocery retail, ICA Real Estate which owns and manages properties, and ICA Bank which offers financial services to Swedish customers. Co. also includes the wholly-owned portfolio companies Forma Publishing Group and inkClub, as well as the partly-owned Cervera, Hemtex and Kjell & Company.
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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