Stockholm Stock Market Ends Week in the Red Despite Saab's Record Rally
The Stockholm stock market faced a decline in a volatile week, despite Saab's remarkable stock surge.
Key Points
- • OMXS index fell 0.7% amid volatile trading.
- • Saab's stock rose 16.4% following a strong earnings report.
- • Atlas Copco's disappointing quarterly report led to a 7.8% drop in its stock.
- • Caution grows among analysts regarding Saab's high valuation.
The Stockholm stock market concluded a turbulent week on July 19, 2025, with the OMXS index falling by 0.7%. The decline followed a day of volatility, exacerbated by Atlas Copco's disappointing quarterly report, which had a significant adverse effect on investor confidence. The report revealed a 7.8% drop in Atlas Copco's stock, while its spinoff, Epiroc, plummeted even further by 9.2%, marking it as the worst performer on the OMXS30 list.
Conversely, Saab's stock emerged as the day's standout performer, surging 16.4% to reach a new all-time high. This rise followed the release of Saab's second-quarter report, which exceeded market expectations with a nearly one-third increase in sales. Although the company reported a decrease in order intake compared to 2024, analysts noted that this was not indicative of a downward trend, as overall order backlog remained strong and higher than the previous year. Saab's organic growth forecast was also raised from 12-16% to 16-20% for 2025.
Despite the positive developments, there are growing concerns about valuation risks associated with Saab's stock, which has seen an impressive increase of over 700% in the last five years, partly driven by heightened demands for defense posturing following geopolitical tensions. According to analysts, a minority are recommending the stock as a buy at current levels, reflecting caution amidst Saab’s spiraling price.
On other fronts, Telia enjoyed a 4.8% boost after announcing the acquisition of Bredband2 for a billion kronor. Meanwhile, Electrolux and Betsson faced significant downturns, with stock prices dropping by 14.3% and 16%, respectively. As for foreign exchange, the US dollar weakened against the Swedish krona, trading at 9.65 kronor per dollar, which echoed similar patterns seen in European markets.
In summary, while Saab's remarkable stock rally has provided a silver lining in an otherwise challenging week for the Stockholm stock market, the overarching sentiment reflects nervousness among investors regarding potential corrections and valuation adjustments in the near future.