Analysts Cautious On Nokian

Nokian’s shares have risen 12 per cent over the past three months and, for the year as a whole, have risen slightly against an 11 per cent general decline in the auto and component sector. The Finish company traditionally makes the lion’s share of profits in the second six months of the year, because of winter tyre sales, plus Nokian has announced a joint venture in Russia and its RoadSnoop tyre pressure monitoring system has great potential. Despite all this, analysts Morgan Stanley have downgraded the company from “Equalweight” to “Underweight”.

The reasons for this caution are 1. A worry that the winter tyre market may not be as good as expected, due to large stocks. 2.

The high level of investment needed and time scale of the Russian JV. 3. The high level of investment in retail expansion which has yet to show returns.