Orkla ASA rose to the highest level in more than a year and a half in Oslo as DNB ASA advised buying shares in the Norwegian company as it transforms itself from an industrial conglomerate into a focused consumer-goods producer.
Shares in Orkla, based in the Norwegian capital, gained as much as 2.9 percent to 50.50 kroner, the highest intraday level since Aug. 1, 2011, and traded 2 percent higher as of 11 a.m. local time. That makes Orkla the biggest gainer today on the Oslo stock exchange’s OBX index of 25 most-traded stocks.
Orkla, which has interests ranging from frozen pizza and underwear through to renewable energy and chemicals, has sold assets as it focuses on becoming a branded goods producer. The company has spun off its Borregaard ASA biochemicals operation and combined its Sapa aluminum-products unit with Norsk Hydro ASA’s while buying Rieber & Soen ASA, which sells ready-made sauces, soups and nuts, and toothbrush-maker Jordan AS.
“We expect increased focus on Orkla as a consumer company and its potential to extract synergies to drive a continued re-rating of the shares,” DNB analyst Haakon Aschehoug said in a note today. The bank upgraded its recommendation on Orkla to buy from hold and increased its 12-month price target to 55 kroner from 52 kroner.
Shares in Orkla have gained 11 percent during the last 12 months, giving it a market value of 50.9 billion kroner ($8.9 billion). That makes it the seventh-largest company listed on the Oslo stock exchange.