FLSmidth Gains as Cuts Seen Improving Profits: Copenhagen MoverChristian Wienberg
FLSmidth & Co. A/S rose the most among Copenhagen’s benchmark stocks today after two of Denmark’s biggest banks raised price estimates on bets the maker of mining equipment’s cost-cutting plan will improve profits.
FLSmidth rose as much as 3.2 percent, making it today’s biggest winner in the Nasdaq OMX Copenhagen 20 Index. The stock added 1.5 percent to 325.70 kroner at 10:05 a.m. in the Danish capital with volume at 82 percent of the three-month daily average.
Danske Bank A/S and Nordea Bank AB raised price estimates today, after Chief Executive Officer Thomas Schulz, who took over this year, said Aug. 23 he will eliminate 1,100 jobs and cut costs elsewhere. The Copenhagen-based company, which has missed analyst net income estimates in its last six quarterly reports, aims to boost earnings before interest, tax and amortization by 750 million kroner ($135 million) in 2015.
“We expect the new CEO to transform FLSmidth from a growth mode to an optimization mode,” Danske Markets said today in a note to clients.
The unit of Danske Bank A/S raised its recommendation on the share to buy from hold and increased a price estimate to 410 kroner. Copenhagen-based Danske’s previous price target was 310 kroner, according to data compiled by Bloomberg.
Nordea Markets in Copenhagen today raised its price estimate to 330 kroner from 315 kroner.
“Given the convincing action plan, we argue that investors should be willing to trade FLSmidth more in line with its peers,” Patrik Setterberg, a Nordea analyst, said in a note.