Shares in the laboratory systems group Tecan dropped by 14.6 per cent in trading on Wednesday after rival Qiagen slashed profit expectations.This content was published on July 3, 2002 - 19:43
Tecan was one of the day's biggest losers on the Swiss stock exchange falling to SFr50 from its previous close of SFr58.55. The stock has been under pressure since reporting a decline in first quarter net profits earlier this year.
Some analysts believe Wednesday's market reaction was unjustified. Analysts at the cantonal bank of Zurich said Tecan's profit expectations already reflected the sluggish growth in demand.
"Based on our current estimates, Tecan is cheap with a 2003 price/earnings ratio of 9.8 and this already reflects the feared zero growth," the bank said in a note to clients.
Last week, BNP Paribas reduced Tecan's price target to SFr50 from SFr60 saying the company faces flat sales for 2002 as their main customers have postponed capital spending.
Dutch-based Qiagen shares fell more than 40 per cent on Wednesday after it cut sales and earnings forecasts due to a drop in spending by drug companies in the United States.
Tecan's stock has lost close to 70 per cent of its value over the past year. First quarter net profits for 2002 fell to SFr9.9 million from SFr11.1 million the year before.
swissinfo with agencies