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Steinhoff share-price collapse blindsides optimistic analysts

Steinhoff on Tuesday still among the stocks on which equity analysts most bullish.

Investors shocked at the money they’re losing on positions in Steinhoff International Holdings have a lot of company in the analyst community.

The shares fell as much as 62% on Wednesday after chief executive officer Markus Jooste resigned amid a probe of accounting irregularities. The market value of the furniture retailer, which is based in South Africa but listed in Germany, has dropped to 4.5 billion euros ($5.3 billion) from about 20 billion euros in June. Still, through Tuesday, Steinhoff was among the stocks on which equity analysts were most bullish.

Among the 50 stocks in Germany’s midcap MDAX index with the highest aggregate recommendations, Steinhoff is the only one to decline this year. The others handed investors returns between 30% and 50%. Even the experts were caught off guard by the Steinhoff probe, which had been brewing since 2015 but took a new dimension on Wednesday.

As of Tuesday, ten analysts rated Steinhoff shares at buy and eight rated them hold. The company had no sell recommendations. Some analysts have placed their ratings under review. The average share-price target by 11 analysts on Wednesday is 4.82 euros, which the shares would have to more than quadruple to reach.

Read: The extent of Steinhoff’s value destruction

Read: Collateral damage: Who owns Steinhoff?

Read: The funds most exposed to Steinhoff

© 2017 Bloomberg

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