Kesko (Buy, TP: EUR20.50) - Feeding stability
While Kesko’s share price has barely moved in the past six months due to soft market sentiment, we remain confident in the favourable risk/reward, based on: 1) cautiously improving end-markets, which we believe should drive continued earnings growth; 2) dominant market positions; 3) c50% exposure to defensive food retail; and 4) an attractive c5% 2025–2027e dividend yield. Given its expanding grocery network and controlled price cuts, we expect Kesko can stabilise its market share, potentially serving as a share-price catalyst. Our Q1e EBIT is a touch above consensus, and we reiterate our BUY and EUR20.5 target price.Kesko is a provider of trading sector services. Co.'s reportable segments are: food trade, which comprises the wholesale and B2B trade of groceries in Finland and the grocery trade in Russia; home and speciality goods trade, which comprises Co.'s K-citymarket Oy subsidiary's home and speciality goods; building and home improvement trade, which includes Co.'s Rautakesko Ltd's subsidiary's wholesale and B2B sales in the building and home improvement and agricultural trade in Finland, and the trade in Sweden, Norway, the Baltic countries, Russia and Belarus; and car and machinery trade, which comprises the business operations of Co.'s subsidiaries, VV-Auto Group Oy and Konekesko Ltd.
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.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.