Feb. 20 (Bloomberg) -- FLSmidth & Co. A/S, Europe’s biggest maker of cement production lines, rose to the highest price in more than 10 months in Copenhagen after JPMorgan Chase & Co. said increased U.S. demand will drive the stock higher.
FLSmidth rose as much as 1.9 percent to 402.80 kroner, the highest price since March 28. The stock gained 0.8 percent to 398.80 kroner at 10:40 a.m. in the Danish capital, with trading volume at 42 percent of the three-month daily average.
Stricter U.S. pollution laws for cement facilities will boost orders for new production lines and help FLSmidth improve profits, JPMorgan analysts, led by Alexander Whight, said in a note distributed today. Revenue in its cement unit may jump as much as 66 percent this year, FLSmidth said earlier this month when the Copenhagen-based company reported fourth-quarter earnings that missed analyst estimates.
“We believe the market will increasingly focus on 2014/15 potential from the U.S. cement opportunity as orders materialize,” JPMorgan said. “We reiterate our overweight rating despite the stock being up 18 percent since December.”
FLSmidth will also benefit from a recovery in its unprofitable material handling division as new management stops “the bleeding” to restore profits as early as this year, JPMorgan said.
The bank raised its December 2013 price target on the share to 435 kroner from 390 kroner.
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