Modern Times Group AB fell the most in eight months in Stockholm trading after Nordea Bank AB said margins at the company’s Pay TV operations will continue to be burdened and downgraded its rating on the stock.
MTG lost as much as 12.5 kronor, or 4.6 percent, to 261 kronor, its steepest intraday drop since Oct. 18. It traded 2.1 percent lower at 267.7 kronor at 9:36 a.m. local time, giving MTG a market value of 18.3 billion kronor ($2.7 billion).
Nordea cut its rating on MTG shares to hold from buy with a price estimate of 300 kronor “after a 21 percent share uptick” this year, according to a note to clients from analyst Johan Grabe today. It also reduced its earnings per share estimates in 2013 to 2015 by 2 percent to 3 percent.
“We expect MTG to post stable progress for its Nordic Free TV business, while the second-quarter Pay TV margins will remain burdened at around 11 percent due to cost hikes,” Grabe said. “We expect continued margin pressure debate to hold back the valuation.”