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Hufvudstaden Falls After Swedbank Cuts Rating: Stockholm Mover

May 22 (Bloomberg) -- Hufvudstaden AB, a developer and property manager in Sweden, declined the most in more than a month in Stockholm trading after Swedbank AB said share-price gains may stall after surging since mid-April.

Hufvudstaden fell as much as 2 percent, the steepest decline since April 10. The stock has climbed by 12 percent in the last month, giving the company a market value of 20.1 billion kronor ($3.04 billion).

“The share has performed well recently, and we now consider the share as reasonably valued,” Swedbank analyst Andreas Daag said in a note to clients.

The company, which builds and manages offices and retail properties in Stockholm and Gothenburg, yesterday reported a decline in first-quarter profit after tax to 265.9 million kronor from 340.6 million kronor a year earlier. Vacancies increased to 5 percent from 3.9 percent.

The results were lower than expected for underlying earnings and vacancies, hurt by lower rental income and higher-than-expected property costs, Swedbank’s Daag said. He downgraded Hufvudstaden to neutral from buy.

Hufvudstaden was up 0.7 percent at 93.30 kronor as of 2:27 p.m.

To contact the reporter on this story: Katarina Gustafsson in Stockholm at kgustafsson@bloomberg.net

To contact the editors responsible for this story: Andrew Blackman at ablackman@bloomberg.net; Celeste Perri at cperri@bloomberg.net

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