The shares slipped as much as 2.6 percent, the biggest drop since Nov. 22. They were down 2.1 percent to 132.60 kronor as of 10:31 a.m., making it the biggest decliner in the OMX Stockholm 30 index.
The stock-rating cut is a result of the share’s recent performance and limited scope for positive estimate revisions, Pareto Securities said in a note. Before today, the Stockholm- based bank had gained more than 33 percent since June 1. Pareto Securities reduced the target price to 140 kronor a share from 142 kronor.
Still, Swedbank remains Pareto’s “favored Swedish banking share” based on its solid capitalization, the note said. The lender’s current common equity Tier 1 ratio of 14.3 percent would allow for an increased payout ratio, while still complying with capital requirements, Pareto Securities said.
To contact the reporter on this story: Janina Pfalzer in Stockholm at firstname.lastname@example.org.
To contact the editor responsible for this story: Christian Wienberg at email@example.com.