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    Axfood (OM:AXFO) Following Q2 Earnings Resilience, Is The Valuation Too Cheap?

    Simply Wall St·07/16/2026 05:24:48
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    Axfood (OM:AXFO) just reported Q2 2026 results that caught investor attention, with net sales and profits higher than a year earlier and Hemköp and City Gross highlighted as key contributors despite food price deflation.

    See our latest analysis for Axfood.

    Despite Axfood reporting higher Q2 2026 net sales and profits, the stock has come under pressure. The 1 day share price return fell 14.9% and the 90 day share price return declined 29.5%, while the 5 year total shareholder return of 14.1% shows a more resilient long term picture.

    If Axfood’s recent move has you reassessing your portfolio, this could be a good moment to broaden your search with 105 top founder-led companies

    Bulls may highlight Axfood’s earnings resilience and its investments in logistics and stores, while bears are likely to emphasize the sharp share price slide and intense price competition. How does the valuation compare with these opposing views?

    Preferred P/E of 20.4x: Is it justified?

    Axfood last closed at SEK227.5 and is trading on a P/E of 20.4x, while our DCF estimate of fair value sits much higher at SEK553.79, suggesting a sizeable gap between price and the SWS DCF model output.

    The P/E ratio compares the share price to earnings per share, so a higher P/E often reflects the market paying up for current earnings and future profit expectations. For a food retail group like Axfood, which operates Willys, Hemköp, City Gross and other chains in Sweden, this multiple is a quick way to see how much investors are willing to pay for its earnings profile compared with peers.

    On one hand, Axfood screens as expensive against the broader European Consumer Retailing industry, with its 20.4x P/E sitting above the 17.8x industry average. On the other hand, it screens as good value versus its own peer set, where the average P/E is 23x, and also screens as good value against an estimated “fair” P/E of 26.2x that the market could trend toward if sentiment and fundamentals aligned more closely.

    Explore the SWS fair ratio for Axfood

    Result: Price-to-earnings of 20.4x (ABOUT RIGHT)

    However, Axfood’s recent share price slide and ongoing food price deflation could pressure sentiment if earnings momentum or competitive positioning begins to look less secure.

    Find out about the key risks to this Axfood narrative.

    Another view on Axfood’s value

    While Axfood screens as reasonably priced on its 20.4x P/E, the SWS DCF model points to a very different picture, with an estimated fair value of SEK553.79 per share versus the current SEK227.5. That gap frames Axfood as undervalued on this approach. This raises the question of which signal may be more informative.

    Look into how the SWS DCF model arrives at its fair value.

    AXFO Discounted Cash Flow as at Jul 2026
    AXFO Discounted Cash Flow as at Jul 2026

    Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Axfood for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 218 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

    Next Steps

    Sitting between concern over risks and optimism about rewards, Axfood clearly splits opinion. Act while the information is fresh and weigh the 4 key rewards and 1 important warning sign

    Looking for more investment ideas beyond Axfood?

    If Axfood has sharpened your focus on opportunities, do not stop here. Fresh ideas elsewhere could be exactly what helps keep your portfolio moving in the right direction.

    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.