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Investing.com - Kepler Cheuvreux has upgraded Kongsberg Gruppen ASA (OL:KOG) from Reduce to Hold while lowering its price target to NOK252.00 from NOK298.00 following a significant share price decline.
The Norwegian defense and maritime technology company’s stock dropped approximately 18% after reporting weaker-than-expected third-quarter results and announcing plans to spin off its Kongsberg Maritime division.
According to Kepler Cheuvreux, the sharp share price reaction was primarily driven by uncertainty regarding the maritime unit’s potential standalone valuation, given its smaller size and scope compared to industry peers.
The brokerage firm noted that the proposed split will ultimately resolve the "inherent valuation discrepancy" between Kongsberg’s Defense and Maritime business segments.
Kepler Cheuvreux’s reduced price target reflects revised peer multiples that have compressed during the quarter from levels the firm previously considered unsustainable, with further visibility expected upon release of the listing prospectus detailing the new divisional structure.
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