Konecranes Oyj advanced to a three-month high in Helsinki as Deutsche Bank AG said clients should buy the Finnish cranemaker’s stock as Europe’s recovering industrial output could boost sales next year.
Konecranes gained 4.2 percent to 26.20 euros at 11:22 a.m. local time, the highest intraday level since June 4. Shares in the Hyvinkaa-based company rose as much as 4.8 percent with trading volume at 76 percent of the three-month daily average.
“We see Konecranes to be a key beneficiary of a cyclical upturn,” Anette Luomanpera, an analyst at Deutsche Bank, said in a note to clients today. “We look past possible weakness in second-half earnings toward the growth in 2014.”
Germany’s manufacturing purchasing managers index increased to 51.8 in August, the highest in two years. The reading hit above 50 for the second month in a row, indicating expansion. Business climate index in manufacturing for Europe’s largest economy has been positive since February, according to the IFO institute in Munich.
Even as industrial production in the euro area fell in July, indicators support future growth, Luomanpera said, raising her recommendation to buy from hold and increasing the price estimate to 30 euros from 25 euros. Konecranes is set to benefit from the manufacturing boost with a delay of two or three quarters, she said.
Konecranes lowered its profit forecast in June as global slowdown in investments and a lackluster shipping industry weighed on the company. The company seeks to cut costs by 30 million euros ($41 million) by the end of 2014, it said on July 24. These measures add further potential to the company, as its fixed cost base was “too high,” Luomanpera said.