December sales: +3.9% comparable sales growth

November sales: -2.4% comparable sales growth

October sales: +2% comparable sales growth

Modest earnings recovery in 2025e

Kesko (Buy, TP: EUR23.00) - Paradigm shift

Q3 earnings beat consensus across the board, primarily driven by growth in Building and Technical Trade (BTT) Finland profit, as we expected. Another highlight was the resilient Grocery Trade (GT) profit margin (flat YOY), further increasing our confidence in Kesko’s strategic execution in the segment. We reiterate our BUY, and have increased our target price to EUR23 (20), following c3% average increases to our 2025–2026e clean EPS. We continue to highlight the appealing 2024–2026e dividend yie...

A solid set of Q3 results

Q3 preview: soft sales and earnings pressure

Kesko (Buy, TP: EUR20.00) - Undervalued earnings recovery

We see potential for a narrowed 2024 EBIT guidance on an improving Building and Technical Trade (BBT) to act as a share price catalyst. Our Q3 focus is also Grocery Trade’s (GT) profitability and the overall outlook. We have increased our 2025–2026e EBIT by c2–2.5% related to M&A, slightly offset by adverse FX, and reiterate our BUY with a raised target price of EUR20 (19). We continue to highlight the appealing 2024–2026e dividend yield of 5%+.

September sales: -2% comparable sales growth

August sales: -4% comparable sales growth

July sales: +4.1% comparable sales growth

Kesko (Buy, TP: EUR19.00) - Time to go shopping

We have upgraded Kesko to BUY (HOLD) and raised our target price to EUR19 (17), implying c17% upside potential. We believe Building and Technical Trade (BTT) earnings are set to outgrow consensus, while investor concerns about Grocery Trade (GT) look overdone. Kesko stands out to us as an attractively valued quality name, with sector-leading fundamentals, and exposure to ‘green’ market trends.

Unexciting short-term outlook: HOLD

Q2'24 EBIT in line with our expectations. Soft short-term outlook, but earnings set to trough. '24e-'26e EPS down 1-2%: HOLD, TP of EUR 17.5.

Kesko (Hold, TP: EUR17.00) - Grocery safeguarding profit

Q2 earnings were a tad below our forecast and consensus, as robust profitability in Grocery Trade (GT) was not enough to compensate for softness in Building and Technical Trade (BTT) and Car Trade (CT). Kesko said it saw signs of a pick-up across BTT’s key markets, but earnings are set to remain under pressure, and we are unsure about the pace of turnaround. We reiterate our HOLD and EUR17 target price, with slight estimate cuts.

Q2 preview: another tough quarter

Pre-reported comp. sales of -4%. We forecast adj. EBIT of EUR 180m (-13% y-o-y). Awaiting margin trough: HOLD reiterated.

Kesko (Hold, TP: EUR17.00) - Narrowing the grocery gap

Kesko’s pre-released June sales showed a soft ending to Q2, especially in the grocery segment (GT). As a result, our focus will be on the GT outlook, profitability and its market share; whether it has kept narrowing, as seen in previous quarters. For cyclical businesses, we expect a muted performance, and we would not rule out another trim to the upper end of the guidance. We reiterate our HOLD and EUR17 target price. The results are due at 07:00 CET on 23 July.

May sales: -2.7% comparable sales growth

April sales: +2.8 comparable (positive calendar)

Brighter beyond Q2

Q1'24 EBIT 6% below our expectations, driven by BTT. Soft short-term outlook but brighter beyond Q2'24e. '24e-'26e down 4-3%, TP cut to EUR 17.5 (18.5), HOLD.

Kesko (Hold, TP: EUR17.00) - Technical(ly) weak

Q1 disappointed due to Building & Technical Trade (BTT) profitability well below expectations. We continue to see a mixed case, with stable to gradually improving Grocery Trade (GT) but still-weak Building & Technical Trade. We reiterate our HOLD but have cut our target price to EUR17 (18), after lowering our 2024–2026e clean EBIT and DPS by c4%.