September 30, 2024 12:35 GMT
CONSUMER STAPLES: Kesko (KESBV; unrated) 5.3Y secondary performance
CONSUMER STAPLES
Kesko equities are hitting a 1yr high but new 5.3Y is a more mute -3 in since pricing last week (very weak books).
It is 10bps north of FV but a discount we sympathise with - co has exposed itself to more cyclical autos and building and home trade through it's other two divisions. Grocery stand-alone is actually impressive on margins (highest among € issuers) and perhaps echoing that it has the highest market share in country of any local issuer (at 34.3%/#2). That is balanced with the country exposure and smaller scale in current FV (vs. CAFP, ADNA).
No firm view at current levels particularly in the face of lacklustre FY guidance (-9% fall in profit at the midpoint) - we are keen to see its 3Q earnings on the 30th of Oct.
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