Elekta Slips as BofAML Sees Margin Pressure: Stockholm Mover

Elekta AB fell the most in three months as Bank of America Corp.’s Merrill Lynch said profitability at the maker of radiation-surgery equipment could be disappointing, due to research spending and pricing pressure.

Elekta declined as much as 5 percent, the steepest intraday fall since March 5, and was trading down 4 percent at 102.60 kronor at 10:56 a.m. in Stockholm. Trading volume was 63 percent of the three-month daily average.

“We view ongoing double-digit top-line growth as already reflected in consensus and believe operating margins could disappoint,” Justin Morris, an analyst at Bank of America Merrill Lynch, said in a note.

Elekta is increasing expenditures on research and development to maintain market-share gains while gross margins are under pressure by price competition, Morris said. He lowered his rating on the stock to underperform from neutral.

Elekta’s shares have risen 1.2 percent this year, giving the Stockholm-based company a market value of 39 billion kronor ($6.0 billion).

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