EON AG fell the most in a week after JPMorgan Chase & Co. and Citigroup Inc. cut recommendations on shares of the largest German utility following recent gains.
EON slid as much as 3.6 percent, the most since June 25. It was cut to neutral from overweight by JPMorgan, while Citigroup reduced it to sell. EON, which has risen 15 percent in Frankfurt in the past month, increased its profit outlook yesterday after reaching a deal with Russia’s OAO Gazprom on natural-gas prices.
“The shares could pause for breath,” JPMorgan said.
EON declined by 3.2 percent to 16.63 euros by 12:32 p.m. in Frankfurt, the second-biggest drop on the benchmark DAX index.
The deal between EON and Gazprom will be backdated to the fourth quarter of 2010 and add about 1 billion euros ($1.3 billion) to EON’s half-year results, the utility said.
Gazprom was the “last of positive newsflow,” Citigroup said. “EON’s equity story is about execution of its dual strategy of cost-cutting and re-investment outside Europe.”
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