Swedish Match AB advanced the most in more than ten months in Stockholm trading after Nomura Holdings Inc. raised its recommendation and earnings estimates for the Swedish maker of snuff and cigars.
The shares jumped as much as 7.8 kronor, or 3.6 percent, to 224.1 kronor, their steepest intraday advance since June 11. The stock traded 3 percent higher at 217.1 kronor as of 11:05 a.m. local time, giving Swedish Match a market value of 45 billion kronor ($6.8 billion). Volumes were at 51 percent of the daily average in the past three months.
Nomura today upgraded its rating on the stock to buy from neutral after raising its earnings-per-share estimate for 2014 by about 5 percent to 13.58 kronor. The Japanese broker raised its share-price estimate by about 40 percent to 288 kronor.
“We see significant re-rating over the next twelve months” on the back of “positive industry volumes, strong pricing, limited capex, supportive tax rate, trough earnings,” Owen Bennett, an analyst at Nomura in London, said in a note. “While pricing resets are not necessarily finished yet in Sweden, we think the market and share price are better prepared for these actions, and signs of success will likely shift the focus to underlying fundamental drivers of value from the new base.”