Rautaruukki Oyj dropped again today for the biggest three-day decline since October as analysts cut their profit estimates for the Finnish maker of stainless steel.
The stock declined as much as 2.2 percent, taking the three-day drop to 7.7 percent. Rautaruukki was down 1.9 percent at 5.05 euros at 4:02 p.m., its lowest intraday price since Nov. 21. It was today’s largest decline in the OMX Helsinki 25 index.
“Rautaruukki can’t adjust its capacity much and result improvement is mostly reliant on cost-cut programs,” Jari Raeisaenen, an analyst at Pohjola Bank Oyj, said today. He lowered a 12-month price target on the shares to 5.70 euros from 5.90 euros and kept a hold recommendation on the stock.
Rautaruukki’s fourth-quarter net loss widened 37 percent to 56 million euros amid a recession in Europe, its main source of revenue, it said on Feb. 15. The company predicted comparable sales staying level with 2012 this year as operating profit improves and becomes positive.
“Future outlook gave no reasons to cheer,” Juha Kinnunen, an analyst at Helsinki-based Inderes Oy, said in a note. Profit levels are “far from any real turnaround” as interest expenses on debt accumulated last year will push the 2013 result “in the red.”
Today’s downgrades included Johannes Grasberger, an analyst at Nordea Bank AB, who cut his price target to 5 euros from 5.50 euros. Ari Jaervinen, an analyst at Danske Bank A/S reduced the target to 5.50 euros from 5.70 euros, while Fabrice Farigoule at France’s Alphavalue SAS dropped it to 6.27 euros from 7.12 euros.