Affärsvärlden has issued a buy recommendation for the grocery retail group Axfood.
In a recent analysis, the publication notes that while the stock may not be exceptionally cheap, the market values its defensive qualities and has typically traded the shares at a multiple of 15-20 times earnings in recent years.
'We are applying a multiple of 16 here. This suggests a 20 percent upside in the stock over a two-to-three-year horizon, including dividends which provide an annual yield of nearly 4 percent. For a company like Axfood, we believe this is sufficient to warrant a buy rating on the stock', Afv writes.
Axfood AB is a Sweden-based company engaged in the food retail and wholesale trade in Sweden. The Company’s retail business is conducted through three wholly owned chains: Willys, specializing in discount food retail; Hemkop, which is engaged in the sales of food retail products, and PrisXtra, which is a grocery chain serving the Stockholm market. The Company owns and operates over 200 retail stores. The Company’s wholesale business is conducted through Dagab, which supplies Axfood Group and the Vi chain, and Axfood Narlivs, a convenience store wholesaler. Axfood has a portfolio of private labels, including Hemkop, Garant, Garant Ekologiska varor, Aware, Saklart, Func and Fixa. Among others, the Company operates via Middagsfrid AB. The Company's major shareholder is Axel Johnson AB.
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