Here are Arttu’s quick comments on this morning’s result
Kesko reported a Q1 report in line with expectations. The development of fundamentals was particularly strong in the grocery trade’s consumer customer business and the building and technical trade’s technical wholesale. The reiterated guidance also met consensus expectations. According to our preliminary assessment, forecast changes following the report will remain moderate, although we first want to hear the company’s views on the drivers behind the unchanged guidance (relative to weakened economic indicators). Kesko’s Finnish-language earnings webcast can be followed here starting at 10:30 am.
Arttu discussed Kesko’s Q1 with President and CEO Jorma Rauhala
Topics:
00:00 Introduction
00:09 Q1 highlights
00:47 Strong performance in the grocery trade
02:54 Competitive landscape and cost pressures
05:41 Onninen’s sales performed well
07:13 Result declined in building and technical trade
08:43 Readiness for acquisitions
10:18 Electric vehicle selection
12:35 Impact of the Middle East conflict
14:09 Guidance
Here is a new company report on Kesko from Arttu after the Q1 results.
Kesko reported a Q1 result in line with expectations, i.e., a good result. Despite uncertainties, we believe the company’s growth outlook appears favorable, driven by factors such as the market share turnaround in the grocery trade and the strong earnings performance in the building and technical trade. In our view, the stock’s earnings-growth-driven expected return is attractive, which is why we reiterate our Add recommendation. We are raising Kesko’s target price to EUR 22.5 (prev. EUR 22.0), driven by forecast changes.
Quote from the report:
Based on the 2026e result, Kesko is valued at 17x P/E and 17x EV/EBIT multiples, which highlight the negative impact of growth investments and a partially soft operating environment. When considering Kesko’s expected return, we believe it is more fruitful to look at the valuation from a longer perspective, which better reflects Kesko’s normalized earnings power. For example, based on 2027e and 2028e earnings, Kesko is priced at 14x and 13x P/E and EV/EBIT multiples, which appear quite attractive to us for a high-quality and partly defensive retail giant.
Every now and then, I like to take a peek at the major shareholders of the companies I own and wonder if my own name might show up there. Just kidding, I’m checking to see if the largest owners have made any moves.
I went through Kesko’s shareholder list for April and compared it to the March figures. I found a few interesting observations.
Net buys amounted to about +668k and sells to -275k shares, resulting in a net of +393k. Practically all the activity occurred in the B-shares.
Biggest buyers:
Pihl Christer popped up on the list with 200,000 shares. However, he’s not exactly a newcomer — already in the 2018 Annual General Meeting participant list, Christer owned 36,000 shares, which corresponds to 144,000 shares after the split. So, he is a long-term owner who has now increased his position by a good ~56,000 shares.
Elo +185,000 B-shares. Quite a brisk move from an employment pension company.
Nordea Bank increased its holding by ~19% (370k → 442k).
Danske Invest Suomi Osake +65k and Evli Suomi Select +25k. So, active Finnish funds see Kesko as attractive at these prices.
On the index fund side, OP-Suomi Indeksi, Nordea Suomi Indeksi, and Suomi-Indeksirahasto were all net positive.
On the sell side, clearly the biggest move was made by Veritas, which sold ~145k shares, or about 16% of its position (885k → 740k). Within the Nordea Group, Pro Suomi and Premium Asset Management sold.
Large domestic pension companies were divided. Elo bought heavily, Veritas sold heavily, while Ilmarinen and Varma didn’t move at all. No unified “smart money” signal in either direction.
The number of Kesko Corporation’s treasury shares decreased by ~16k, which is likely due to an employee share issue or the delivery of share-based incentives.
The overall picture is slightly positive. There were more active buys than sells, a new large private investor entered, and index funds are accumulating.
Not a groundbreaking month as such, but institutional demand still appears to be in good shape.
Sales growth continued in April, with sales increasing by 7.7%. In the building and technical trade, sales grew strongly in all operating countries. In the grocery trade, sales decreased by 1.5%, but this was particularly affected by the timing of Easter wholesale sales, which occurred mainly in March this year instead of April last year. In the car trade, sales grew in used cars, while sales in new cars and services remained at the previous year’s level. Sales also grew in the sports trade.
Just kidding, I’m checking to see if the largest owners have made any moves.