SKF AB, the world’s biggest maker of bearings, rose the most in three weeks in Stockholm trading after Nordea Bank AB said a return to growth will lead to record earnings in 2015 and advised clients to buy the stock.
The shares advanced as much as 1 percent to 177.30 kronor, their steepest increase since Sept. 19. The stock added 0.6 percent to 176.70 kronor as of 10:06 a.m. local time, valuing the Gothenburg, Sweden-based company at 80.5 billion kronor ($12.4 billion) and taking this year’s advance to 8.2 percent.
Nordea upgraded its recommendation on SKF to buy from hold today and increased its 12-month share price estimate to 200 kronor from 183 kronor. SKF’s cost-cutting program and the company’s recent acquisition of Kaydon Corp. will help create “very strong” earnings growth at SKF, suggesting record earnings per share of 16.3 kronor in 2015, Nordea said.
“Recent trips to Germany and China, plus macro indicators, leave us confident in a clear return to growth for SKF,” Andreas Koski and Andreas Brock, senior analysts at Nordea in Stockholm, wrote in a note to clients.
SKF, which plans to report third-quarter earnings on Oct. 15, said on Jan. 14 it would seek to cut 3 billion kronor in costs by the end of 2015 as production is moved from western European countries to eastern Europe, Asia and Latin America.
Of the 28 analysts that cover SKF and share their ratings with Bloomberg, 29 percent advise clients to buy SKF shares while 43 percent have hold ratings and 29 percent advise clients to sell the stock. The average share-price estimate is 181.4 kronor, according to data compiled by Bloomberg.