Saab came under pressure on Monday after Citi reiterated its sell recommendation and Dagens industri labeled the defense company with a sell tag in its "Stock of the Week" column.
In Citi's case, the bank warns of Saab's stretched valuation compared to its competitors, according to Bloomberg News.
The bank assesses that the expected profit growth, especially after 2030, is unlikely to justify the current share price.
The analysis firm also notes that Saab is well-positioned for European rearmament and boasts strong leadership.
Dagens industri's recommendation is also based on Saab's high valuation. The newspaper argues that the company simply cannot generate the cash flows required to justify its current market value.
Saab's stock initially dropped by nearly 4 percent, but has since recovered part of the loss and is, at the time of writing, down 2.5 percent.
SAAB AB is a world leader in the design, manufacturing and marketing of defense and security systems and equipment for military, space and civil sectors. Net sales break down by family of products and services as follows:
- electronic defense systems (33.4%): radars, sensors, submarine and terrestrial airborne surveillance systems;
- armament equipment and systems (25.6%): military equipment, missile systems, weapon systems, ammunition, armed forces identification systems, camouflage systems, etc. The group also provides security and defense solutions (combat systems, training, simulation, security and communication solutions, air and sea traffic management systems, etc.);
- aeronautical systems (24%): military aircraft, combat aircraft, avionics, etc.;
- naval systems (11.8%): submarines, combat ships, underwater mine detection systems, etc.;
- support services (4.2%): provision of services in the areas of systems development, integration and security, information security, communications, technical information, logistics, etc., and technological consulting in the fields of aviation, defense, telecommunications, etc.;
- other (1.1%).
Net sales are distributed geographically as follows: Sweden (41.1%), Europe (25.8%), North America (8.9%), Asia (7.4%), Latin America (4.3%), Australia (3.8%), Africa (0.6%), and other (8.1%).
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ESG MSCI
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