Swedish food retail market: flat in April

March: Pulp shipments +8% y-o-y

Case intact after neutral Q1

Q1 EBITA in line with consensus. Minor revisions, '24e EBITA down marginally. Reiterate BUY, unchanged TP of SEK 125.

TIGO (Buy, TP: $30, +30%) Millicom - Upgrades following Q1s support r...

Following strong Q1s last week we have pushed our target to $30, from $24. Underlying upgrades are 5-6% at EBITDA and we have trimmed capex further. Partly mitigating factors are 1/ We have cut our expectation for a dividend from Honduras, and 2/ Built in a 50% likelihood of a devaluation in Bolivia, though this doesn’t appear very imminent (we include in our valuation, not in estimates)

Efficiency masterpiece - up to BUY

Efficiencies well-executed, strong margin lift and low capex. We raise '24e-'26e EBITDA by 5-3%, and FCF by 7-6%. Up to BUY (Hold) on 14-19% '24e-'26e FCF yield with increased conviction.

Securitas (Buy, TP: SEK158.00) - North America showing the way

The North American operation continued to shine in Q1, growing with strong earnings leverage, while Europe remained in transformation mode. We have raised our 2024–2026e EPS by 3–5% on the results, mainly due to FX. We still see a strong transformation case, as the journey towards the 8% profit margin target by end-2025 (LTM 6.6%) continues, with the riskier early part of the Stanley Security integration now largely finalised. We reiterate our BUY and SEK158 target price.

Strong Q1 across the board

Struggle in Europe main issue in Q1

Improving outlook

Q1e: EBITDA growth to reach double-digits, but limited FCF so far. Colombia upgrades on improved competitive outlook. Uncertainty outweighing the attractive 15% FCF yield, keep HOLD.

Axfood (Buy, TP: SEK330.00) - Healthy Q1

We consider this a stable start to 2024, with the Q1 results more or less in line with consensus. The still-weak Swedish consumer continues to seek value for money and campaigns, but Axfood reported healthy volume growth and good customer traffic. Although the sales growth gap to the market is closing, we expect Axfood to perform well in 2024. We reiterate our BUY and SEK330 target price, having made only minor estimate changes.

The outlook remains positive

All-time-high earnings in Hemköp saved the quarter. 9% EPS CAGR in '24e-'25e. Reiterate BUY and our TP of SEK 320.

Axfood (Buy, TP: SEK330.00) - A neutral Q1 report

We consider this a neutral report for Axfood, with adjusted EBIT more or less in line with consensus. Axfood continues to outgrow the market. We expect limited changes to consensus 2024e adj. EBIT on the results and expect a neutral share price reaction.

Q1 results in line with expectations

Billerud (Buy, TP: SEK130.00) - US bolstering the team

The Q1 report demonstrates that Billerud is in good shape and, most importantly, significantly improved in pricing power across the board, in our view. Our optimistic earnings scenarios for Europe and North America are largely unchanged and we stress that a lot of earnings uncertainty has been eliminated. With modest consensus earnings expectations, attractive long-term valuation potential and a possibility for value creation from future conversion investments in the US, our confidence in the in...

In need of price hikes to offset wood costs

Q1 better – no wood is no good for Q2. Early-cyclicals improve, but paper still weak. Mid-cycle valuation points to SEK 135/share. BUY.

Billerud (Buy, TP: SEK128.00) - Strengthened investment case

We have left our estimates largely unchanged, but given a number of signs of better demand and pricing power for most products, we believe ample risks in our optimistic 2024–2026e have come off. Due to modest earnings expectations, attractive long-term valuation potential and possible value creation from future conversion investments in the US, we believe the investment case has become even stronger. We reiterate our BUY but have raised our target price to SEK128 (126).

Retail Sector Report - ReTales Q4 2023

Retail Sector Report - ReTales Q4 2023

Retail Sector Report - ReTales Q4 2023

Retail Sector Report - ReTales Q4 2023

Axfood (Buy, TP: SEK330.00) - Volumes in the industry improving

We are neutral ahead of Axfood’s Q1 report (due at 07:00 on 25 April), as we expect continued strong sales growth for Willys and improved efficiency for Dagab supporting lower costs. We also expect focus to be on its ongoing ramp-up at Bålsta and its synergies for 2024–2025e. We reiterate our BUY and have raised our target price to SEK330 (320) on higher estimates. We still like the earnings momentum and strong discount position in Sweden.

Securitas AB: 1 director

A director at Securitas AB bought 46,000 shares at 107.870SEK and the significance rating of the trade was 87/100. Is that information sufficient for you to make an investment decision? This report gives details of those trades and adds context and analysis to them such that you can judge whether these trading decisions are ones worth following. Included in the report is a detailed share price chart which plots discretionary trades by all the company's directors over the last two years clearly...