Equity analysts are largely opting to lower their price targets for investment firm Kinnevik in the wake of its first-quarter results.
Handelsbanken has revised its price target to SEK 59 (77) while reiterating its Hold recommendation.
The bank notes that while Kinnevik presented measures to improve conditions for a new permanent CEO, it failed to provide further clarity on potential short-term catalysts, which supports a neutral stance on the stock.
The new price target was derived under the assumption of a 10 percent annual growth in net asset value (NAV) and a 45 percent discount to reflect valuation uncertainties.
"This implies a total expected return of 7 percent, and we therefore maintain our Hold recommendation," SHB wrote.
Pareto Securities and Nordea also lowered their price targets to SEK 71 (74) and SEK 72 (112) respectively, though both firms reiterated their Buy ratings.
"With a comprehensive revaluation, continued strong operational performance among major portfolio companies, a sharpened strategic focus on selected sectors, and necessary cost-cutting measures implemented, the foundations are now in place for a return to NAV growth from a new baseline. With a 45 percent discount to NAV (62 percent excluding net cash), the risk/reward profile is attractive," Pareto stated.
Meanwhile, Nordea believes there is excessive pessimism surrounding the stock, as reflected in the steep NAV discount.
"We recognize that this will not be a quick fix, but changes are underway and we expect to see gradual improvements ahead," the bank noted.
Furthermore, DNB Carnegie lowered its price target to SEK 63 (100) and downgraded its recommendation to Hold (Buy). Conversely, SEB bucked the trend by raising its price target to SEK 56 (52) while maintaining a Hold rating.
Kinnevik's more heavily traded B-shares are down 2.5 percent.
Kinnevik AB is a Sweden-based investment company focused on building digital consumer businesses. The Company's operations are divided into four segments, namely: E-commerce and Marketplaces, Communication, Entertainment and Financial Services. The E-commerce and Marketplaces segment is represented by such investments, as Zalando, Global Fashion Group, Qliro Group, Home24, Lazada, Linio, Konga and Rocket Internet, among others. The Communication segment is represented by such investments, as Tele2 and MiIlicom. The Entertainment segment is represented by MTG and Metro investments. The Financial services segment is represented by Bayport, Betterment, Bima investments. The Company operates globally in more than 80 counties.
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