Novozymes A/S, the world’s largest maker of industrial enzymes, fell the most in five weeks in Copenhagen after UBS AG said recent gains in the stock price imply unrealistic growth rates for the company’s main products.
Novozymes lost as much as 3.1 percent, the most since Jan. 11. The stock fell 2.9 percent to 186.40 kroner at 9:50 a.m. in the Danish capital, with trading volume at 23 percent of the three-month daily average.
Novozymes, which last month reported fourth-quarter earnings that beat analyst estimates, had gained 21 percent this year before today, compared with a 7 percent rise in the Copenhagen all-share index. UBS today said the advance has “stretched valuations too far” and lowered its recommendation on the stock to sell from neutral.
“Valuation is too optimistic on growth,” UBS analysts, including Joe Dewhurst, said in a note.
The current share price either implies over-estimated growth in global bioethanol production or in the use of enzyme-based detergents, UBS said. Bagsvaerd, Denmark-based Novozymes is the world’s largest provider of enzymes for both products.
Novozymes on Jan. 21 reported fourth-quarter net income of 493 million kroner ($88.1 million), beating the average estimate of 427 million kroner in a Bloomberg survey of analysts. The company said then that Peder Holk Nielsen will take over as chief executive officer from retiring Steen Riisgaard, as of April 1.
Separately, Novozymes said today Thomas Nagy, its executive vice president for corporate positioning, sold personal holdings of company shares worth 3.2 million kroner, bringing the total he sold over the last week to about 16 million kroner.