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Currency Woes Impact Oriflame

Cosmetic firm lowers earnings outlook

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By: TOM BRANNA

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Analysts at Kaupthing Bank reiterate their “neutral” rating on Oriflame Cosmetics SA, while reducing their estimates for the company. The target price has been reduced from SEK485 to SEK475.

In a research note published Friday, the analysts mention that the company has reported its 1Q08 revenues in-line with and pre-tax profits short of the consensus. There could be some profit taking by investors in the near term, the analysts say. A rise in currency and financing costs is expected to adversely impact Oriflame Cosmetics’ earnings going ahead, Kaupthing Bank adds. The EPS estimates for 2008 and 2009 have been reduced by 1% and 3%, respectively.

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