Lyko Group (Sell, TP: SEK95.00) - Stretched balance sheet

Following the Q1 report, we believe Lyko will not only have to make more substantial progress in balancing growth and cost control, but also consider new funding options more seriously. With financial expenses eating up earnings, its current debt position, and stretched balance sheet (net debt/EBITDA c4.6x), we have downgraded to SELL (HOLD) and cut our target price to SEK95 (128).

Essity Aktiebolag (publ): 1 director

A director at Essity Aktiebolag (publ) bought 12,008 shares at 273.140SEK and the significance rating of the trade was 82/100. 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 y...

Boozt (Hold, TP: SEK135.00) - Spring/summer sales out of fashion

Q1 earnings missed consensus by 13%, reflecting a weak start to spring/summer sales; however, Boozt reiterated its full-year revenue and EBIT margin guidance. That said, uncertainty is still high (reflected in the wide guidance range), with Nordic consumer confidence still subdued. We reiterate our HOLD but have cut our target price to SEK135 (140) on our lower estimates.

Ready for spring

Softer top line as campaign goods are scarce. We raise '25e-'26e adj. EBIT by 1-2%. Share trading at 15x '24e EV/EBIT, we reiterate BUY.

Boozt (Hold, TP: SEK140.00) - Soft start to 2024

We consider this a weak report for Boozt, including Q1 figures slightly below consensus and a very weak FCF. We expect consensus 2024e adj. EBIT to come down c1–3% on the weaker than expected figures and a negative share price reaction.

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.

AAK (Buy, TP: SEK295.00) - 2024 likely to be a record year

Q1 was solid, with adj. EBIT 17% above consensus, driven by still-strong EBIT/kg and a return to organic volume growth. With high cocoa prices set for the near future and AAK’s solid position in helping customers shift into non-cocoa solutions (along with an ongoing factory optimisation programme), we still like AAK’s earnings momentum. We reiterate our BUY and have raised our target price to SEK295 (270) on higher estimates.

Strong data sales is the highlight

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.

Early signs of margin improvements

Strong Nordics growth of 24% y-o-y. No automation capex in Q1, flat EBIT margins. We reiterate BUY and our TP of SEK 160.

Essity (Buy, TP: SEK330.00) - Financial targets up next

The solid Q1 results were aided by the ongoing gross margin recovery, YOY and QOQ. We expect investor focus from here to be on whether Essity can offset rising raw material costs through agility and pricing power. We see new financial targets and capital allocations as the next potential share-price catalysts; we reiterate our BUY and have edged up our target price to SEK330 (325).

Pulp fiction in Q1, reality for Q2

AAK (Buy, TP: SEK270.00) - Yet another strong quarter

We consider this a positive report for AAK, including adjusted EBIT 17% above consensus, strong cash flow, EBIT/kg above SEK2 once again and an EBIT margin above 10%. We expect consensus 2024e adj. EBIT to come up c5–10% on the results and believe a positive share price reaction is warranted.

Lyko Group (Hold, TP: SEK128.00) - Gross margin trend still negative

The Q1 report was weak, with the gross margin down c120bp YOY, a net loss, and a higher-than-expected net debt/EBITDA (incl. IFRS 16) of c4.6x. We expect consensus 2024–2025e EBIT to come down by c2–4% and net profit by c20–30%. We believe a negative share price reaction is warranted today.

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.

Essity (Buy, TP: SEK325.00) - Good Q2, but no buybacks

We consider this a positive report for Essity, with Q1 adj. EBITA 10% above consensus, mainly driven by a strong gross margin. That said, no financial targets or buybacks following the Vinda transaction were announced, and we expect any conference call comments to be in focus. We expect consensus 2024e adj. EBITA to come up c2% on the results and expect a positive share price reaction.

Q1 results in line with expectations

Rebasing the European expansion

Bilia AB (Buy, TP: SEK148.00) - Inflection point for new car orders

While management had flagged that Q1 was likely to be soft, operating earnings just beat our estimate. The key positive in the report was underlying order intake (after seven consecutive quarterly declines), helped by a recovery in Norway. We expect high campaign activity to extend the trend in Q2, along with still stable demand for service operations. We reiterate our BUY and have raised our target price to SEK148 (145).

Bilia AB (Buy, TP: SEK145.00) - A turning point in new car orders

We consider this a positive report for Bilia, including operating earnings slightly above consensus, strong organic growth for its service business and positive order intake for new cars (after seven quarters of decline) as Norway looks to be recovering. We expect consensus 2024e operating earnings to come up c1–3% on the back of the report and expect a positive share price reaction.