May 21 (Bloomberg) -- Swedish Match AB fell the most in almost four weeks after Berenberg Bank said the Swedish maker of snuff and cigars is unlikely to try increase prices again until the end of 2013.
Swedish Match dropped as much as 2.1 percent to 234 kronor, the steepest intraday decline since April 26, and was trading down 1.7 percent at 1:58 p.m. in Stockholm. Volume was 50 percent of the three-month daily average. The drop today pared the stock’s gain this year to 7.8 percent.
Domestic competition forced the Stockholm-based tobacco producer to roll back a price increase on its Kaliber budget snus brand earlier this year. Pressure has eased lately as Imperial Tobacco Group Plc and British American Tobacco Plc increased what they charged customers for their low-cost products in Sweden, Erik Bloomquist, a London-based analyst Berenberg Bank, said today in a report to investors.
“We believe the share price is already factoring in some of this benefit, and think earnings estimates need to catch up with the share price,” Bloomquist said, reducing his recommendation on Swedish Match to hold from buy. The stock is “likely to trade sideways, with the next major catalyst the successful implementation of price increases across segments in the Swedish market, an event we do not expect until the end of the year.”
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