SCA Slumps as Pareto Sees Efficiency Concerns: Stockholm Mover

Svenska Cellulosa AB fell the most in three weeks in Stockholm trading after Pareto Securities ASA advised investors to sell shares of Europe’s largest paper tissue-maker amid concerns about its efficiency measures.

The shares dropped as much as 2.1 percent to 165.8 kronor, their steepest intraday decline since Aug. 30. The stock lost 2 percent to 166.1 kronor as of 2:38 p.m. local time, making it the second-biggest loser on the OMX Stockholm 30 index today.

Teemu Vainio, an analyst at Pareto in Oslo, cut his rating on SCA to sell from hold and lowered his share-price estimate to 160 kronor from 165 kronor, according to a note to clients. Of the 22 analysts that cover SCA and share their ratings with Bloomberg, five now have sell recommendations, six rate the shares hold and 11 have buy ratings. SCA shares have gained 18 percent so far this year.

Shares of the Swedish company are now “fully pricing in the announced efficiency measures and unflinching solid progress into the coming years,” Vainio said in the note. Pareto also has “a more conservative stance on the potential to actually capture all the efficiency improvements and hence realize robust margin expansion to the full,” he said.

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