Stockmann Shares Decline as SEB Sheds Buy Rating: Helsinki Mover
Stockmann Oyj (STCBV) fell to the lowest level in more than 15 months in Helsinki trading after SEB AB cut its recommendation on the stock, citing falling sales and worsening profitability.
Stockmann shares slid as much as 2.7 percent to 11.87 euros, the lowest since Dec. 30, 2011. The stock traded 1.8 percent lower at 11.98 euros as of 3:01 p.m. local time. The volume on the shares was 60 percent of the average daily trading over the past three months.
The company faces increasing competition and higher fixed costs in Finland, where its operating margin is falling, Jutta Rahikainen, an analyst at Stockholm-based SEB, said in a note to clients. The “margin can improve in time but it requires good sales growth, which is not likely in the near term,” she said. In Sweden, Stockmann’s Lindex clothing chain can recover margins “once the weak Swedish apparel market picks up.”
Stockmann, the owner of department stores in Finland and Russia, was cut to hold from buy at SEB, which lowered its 12- month price estimate on the stock by 24 percent to 13 euros. Cold weather and slow economic growth in Stockmann’s markets led to poor first-quarter sales, it said.
The retailer’s first-quarter sales probably fell 2.6 percent to 438.6 million euros ($576 million), according to the average of five analysts’ estimates compiled by Bloomberg. Stockmann is scheduled to publish its first-quarter earnings on April 26.
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