Uponor Drops as Danske Says Sell on Housing: Helsinki Mover
Uponor Oyj (UNR1V) fell for a fourth day this week in Helsinki trading after Danske Bank A/S said clients should sell the stock because the Finnish maker of plumbing systems will suffer from a weak European housing market.
Uponor declined as much as 5.4 percent and lost 3.2 percent to 8.6 euros at 12:20 p.m. in the Finnish capital. The shares of the Vantaa, Finland-based company have lost 4.4 percent this week, heading for the worst weekly performance since the beginning of August.
A lack of European construction projects has hurt Uponor earnings as the sovereign debt crisis weakens demand. Eurozone construction confidence declined 4.6 points to minus 33.1 in August from the previous month, according to the European Commission. The figure has been negative since November 2007.
“Despite a positive outlook in the U.S., we believe Uponor’s exposure to European new housing volumes is too high at the current valuation,” Ari Jaervinen, an analyst with Danske, said in today’s note. “The sales outlook is weakening in the Nordics and raw material pressure could tighten again towards end-2012.”
Jaervinen lowered Danske’s recommendation on to sell from hold and cut a share price estimate to 8 euros from 8.5 euros.
Separately, Uponor and KWH Group Oy today said they plan to combine their infrastructure businesses, focusing on northern Europe. The new entity will be named Uponor Infra Oy and ownership will be split at 55.3 percent going to Uponor and 44.7 percent to KWH.
The joint venture, which will be consolidated to Uponor’s financial statements, had combined net sales of 384 million euros ($500 million) last year, according to a statement.
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