NKT Advances as Nordea Predicts Split-Up Boost: Copenhagen MoverChristian Wienberg
NKT Holding A/S, which dismissed its chief executive officer yesterday, rose for a second day in Copenhagen trading after Nordea Markets said the company’s valuation will rise as it may split up.
NKT rose as much as 3.5 percent to 258.50 kroner, the highest price since May 8, 2012. The stock gained 2.7 percent to 256.60 kroner at 10:16 a.m. in the Danish capital with volume at 175 percent of the three-month daily average.
NKT shares rose 9.4 percent yesterday when the company reported earnings that beat analyst estimates and said group CEO Thomas Hofman-Bang leaves as the units -- a cable maker, a fiber-based measuring equipment producer and a maker of vacuum cleaners -- will now report directly to NKT’s board. Nordea today said the new set-up will make it easier for the Broendby, Denmark-based company to sell the divisions and raised its recommendation on the share to buy from hold.
“We argue that the new management structure should make investors more focused on a sum-of-the-parts valuation approach for NKT Holding,” Patrik Setterberg, an analyst with Nordea, said in a note to clients. He raised his share price estimate to 290 kroner from 250 kroner.
NKT yesterday reported second-quarter earnings before interest, tax depreciation and amortization of 279 million kroner ($50 million), exceeding the average analyst estimate of 272 million kroner in a Bloomberg survey.
Under Hofman-Bang’s CEO tenure, which started in 2006, NKT shares have lost about 13 percent compared with a 28 percent gain in the Nasdaq OMX Copenhagen All-share index. Hofman-Bang will leave at the end of August, NKT said yesterday.
“The new structure could make it easier to break up the group at some point in time,” said Setterberg, who’s based in Copenhagen. “For now, we believe NKT will focus more on the ongoing turnaround in NKT Cables than a potential break-up of the group.”