Aug. 5 (Bloomberg) -- IC Companys A/S, Denmark’s largest listed clothing retailer, rose in Copenhagen trading after Nordea Bank AB said changes to IC’s top management will boost the dividend yield and recommended that investors buy the stock.
IC rose as much as 2.1 percent to 145 kroner and traded at that price at 10:32 a.m. in the Danish capital, heading for its highest closing price since Oct. 28, 2011. Trading volume was at 78 percent of the three-month daily average.
IC’s board on July 30 said Mads Ryder will replace Chief Executive Officer Niels Mikkelsen as the Copenhagen-based company needs more focus on execution. Nordea today repeated a recommendation that investors buy IC stock and increased its share price estimate to 160 kroner from 140 kroner.
“The CEO change and better markets should enable the share to trade more in line with its fundamental value,” Dan Kirk Wejse, a Copenhagen-based analyst at Nordea, said in a note to clients, adding that net debt is “very low” at IC. “Combined with earnings growth and good cash flow this sets the scene for solid cash returns in the coming years.”
IC’s dividend yield has been below the average of the Copenhagen all-share index of 158 companies since September last year, according to data compiled by Bloomberg. The company will on Aug. 22 report fourth-quarter earnings and provide a financial outlook for the 12 months ending June 30, 2014.
“We are convinced that underlying earnings will improve, but new restructuring and the new CEO possibly being cautious at first bring uncertainty to guidance,” Nordea said.
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