Kone Oyj (KNEBV), the Finnish elevator supplier to London’s Shard, fell the most in five weeks in Helsinki as Nordea Bank AB said clients should sell the shares because yesterday’s jump made them overpriced.
Kone dropped as much as 2.8 percent, the most since Aug. 7. The stock fell 2.3 percent to 66.85 euros at 1:24 p.m. local time with trading volume at 58 percent of the three-month daily average.
Kone jumped 4.6 percent yesterday after the Espoo-based company raised its full-year forecast for earnings before interest and taxes to as high as 955 million euros ($1.27 billion) from as high as 920 million euros before, citing strong Chinese demand. Nordea today cut its recommendation on the stock to sell from hold and said Kone’s new forecast should have been reflected in market expectations.
Kone’s previous outlook was “too cautious,” Jan Kaijala, an analyst at Nordea said in a note. “Kone raised its 2013 guidance closer to where the market expectations already were.”
All 14 Ebit estimates submitted by analysts before yesterday’s outlook change were above the higher end of Kone’s previous forecast, according to data compiled by Bloomberg.
Kone has benefited from infrastructure investments in Asia as the continent develops its urban areas. Its revenue share from the the Asia-Pacific region grew to 43 percent during the second quarter, neck-and-neck with the region of Europe, Middle East and Africa. The company is bucking the declining trend for European industrial companies, having raised its forecast twice earlier this year.
This performance has led to “unsustainable” valuation compared with peers, Kaijala said. The multiple of Kone’s enterprise value to estimated Ebit for next year is 16.8, compared with 12.5 for its Swiss competitor Schindler AG, according to data compiled by Bloomberg.
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