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IFS Jumps as SEB Raises Recommendation to Buy: Stockholm Mover

April 19 (Bloomberg) -- Industrial & Financial Systems AB, a Swedish maker of business software, rose the most in nine weeks in Stockholm trading after SEB AB recommended investors buy the shares, citing the company’s cost-cutting program.

The shares climbed as much as 5.5 kronor, or 4.7 percent, to 122.75 kronor and traded at that level as of 10:39 a.m. Swedish time, the steepest advance since Feb. 14 and the highest price since March 13. The stock has jumped 19 percent so far this year, giving the company a market value of 3.1 billion kronor ($475 million).

IFS yesterday reported that first-quarter license revenue rose to 84 million kronor from 83 million kronor in the same period a year earlier. The Linkoping, Sweden-based company reported a net loss of 74 million kronor, compared with a profit of 7 million a year earlier, after booking an expense of 92 million kronor related to its cost-cutting program. SEB today raised its rating on IFS to buy from hold, with a 12-month price target of 130 kronor per share.

“Having taken a one-off for the restructuring program in the first quarter, we expect IFS to prove to the market that cost-cutting is paying off, with improved consulting margins adding to a strong pipeline to support new license sales and maintenance revenues,” Johanna Ahlqvist, an analyst at SEB in Stockholm, wrote in a note to clients today.

IFS’s customers in the oil and gas, power generation and defense industries are less affected by Europe’s debt crisis than other businesses, which supports the company’s profits, Chief Executive Officer Alastair Sorbie said yesterday. The company’s underlying business remains strong, he said.

“Despite entering yet another year with challenges in the global financial market we continue to see good growth,” Sorbie said in a statement yesterday.

To contact the reporter on this story: Adam Ewing in Stockholm at aewing5@bloomberg.net

To contact the editor responsible for this story: Niklas Magnusson at nmagnusson1@bloomberg.net

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