Danske cuts Axfood to 'hold' on higher oper cost headwind

Axfood AB

22/09/2022 11:53

** Danske Bank cuts rating on Axfood  AXFO.ST  to "hold"
from "buy," citing increased operating costs 
    ** The company will face headwinds from rising energy prices
and wage inflation, Danske analyst Daniel Schmidt says
    ** Axfood will be moving warehouses and will have to run
double warehouses for some time in 2023, he points out, with
operating at double capacity generating additional costs
    ** The Swedish food retailer is in the process of replacing
some of its existing warehouses by a new logistics centre in
Bålsta, outside Stockholm, with the facility expected to be
fully operational in 2023
    ** The headwinds are accompanied by steep valuation, Schmidt
also adds 
    ** The stock, which has gained 12% year-to-date, falls 7% at
1030 GMT to the bottom of pan-European STOXX  .STOXX  index
 (Reporting by Agata Rybska)
 ((agata.rybska@tr.com))