SAS shares have fallen sharply on Wednesday since the Norwegian bank’s target price fell.
Carrier SAS shares fell 24 percent on Wednesday. Prior to this, the Norwegian bank DNB lowered the target price of the airline’s share due to the threat of bankruptcy.
DNB reduced its target price from SEK 1 to SEK 0.40. The bank kept the share at the level of the investment recommendation “sells”, says the news agency Direkt Swedish newspaper According to Dagens Industri.
SAS shares traded on SEK 1.20 on the Stockholm Stock Exchange on Wednesday afternoon.
In their review, DNB analysts estimate that the restructuring of SAS seems inevitable. Otherwise, the company threatens to go bankrupt, DNB believes.
According to DNB, the decrease in the target share price is the result of SAS’s lower earnings forecasts and increased financial risk.
DNB considers that SAS has limited scope to adapt its flight capacity to the low demand caused by the corona situation.
The bank estimates that SAS suffered losses of SEK 17.6 billion, or about € 1.67 billion, during the pandemic.
According to DNB, SAS’s balance sheet is not large enough to withstand this loss in the long term.
SAS is the national airline of Sweden and Denmark. According to Refinitiv, its market capitalization on Wednesday afternoon was just under EUR 1.1 billion. At the same time, the value of Finnair was about EUR 894 million and Norwegian’s just over EUR 1.1 billion.
The market value describes the total value of all shares.
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