Scania AB (SCVB), the Swedish truckmaker controlled by Volkswagen AG, fell the most in more than a month in Stockholm trading after Bank of America Merrill Lynch said Scania’s earnings may suffer from a strong krona.
The shares dropped as much as 2.1 percent to 134.1 kronor, their steepest decline since Aug. 27. They lost 1.7 percent to 134.6 kronor as of 10:33 a.m. local time, with trading volume at 26 percent of the daily average in the past three months. Scania was the third-biggest decliner on the Stockholm OMX 30 benchmark index today.
BofA Merrill Lynch today cut its recommendation on Scania to neutral from buy after lowering its forecasts for the company’s earnings before interest and taxes by 15 percent for this year and by 11 percent for 2014. The bank said profit will suffer from the Swedish krona’s strength against other currencies, including Brazil’s real. Soedertaelje, Sweden-based Scania has this year reported rising market share in the South American country.
“There could be some moderate risk to earnings in the second half of 2013 due to translation impact from the Brazilian real,” BofA Merrill Lynch said in the note. It added that there is “little upside to 2014 forecasts with consensus already forecasting 18 percent growth” and that there is “potential for an overhang in EU truck orders in the first half of 2014.”
Of the 26 analysts that cover Scania and share their recommendations with Bloomberg, 11 advise their clients to sell the shares while eight have hold recommendations and seven advise clients to buy the stock.
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