September 17, 2019 / 9:30 AM / 5 months ago

UPDATE 1-Husqvarna shares cut back as mower firm sticks to margin goal

* Targets EBIT margin above 10% from 2020, same as before

* Targets 4-5% sales growth vs previous goal 3-5%

* Hosts capital markets day in Sweden on Tuesday

* Bets on robotic and other battery-driven gear

* Shares down 5% (Adds CEO, detail, background, analyst, share reaction)

STOCKHOLM, Sept 17 (Reuters) - Sweden’s Husqvarna unveiled new financial targets on Tuesday that left investors underwhelmed, hitting shares in the world’s biggest maker of gardening power equipment such as trimmers and robotic lawn mowers.

Husqvarna said it would from 2020 onwards aim for 4-5% sales growth. Its previous growth target, set in 2017, was for 3-5%. In 2018, growth slowed to 3.7% from 7.7% the year before.

The company also stuck to an operating margin target of above 10%. In 2018, the operating margin excluding items affecting comparability shrank to 7.9% from 9.6%.

Kepler Cheuvreux analyst Johan Eliason said the market had expected a higher margin target, and the raised sales target risked more spending on research and development as well as marketing.

At a capital markets in Huskvarna in southern Sweden, where Husqvarna was founded, Chief Financial Officer Glen Instore acknowledged investments would put some pressure on margins.

Husqvarna’s shares were down 5% at 0900 GMT, reducing their year-to-date rise to 20%.

Husqvarna makes the bulk of its sales from petrol-driven tools but aims to grow its share of battery-driven ones.

CEO Kai Warn estimated the value of the residential robotic lawn mower market at 7 billion crowns ($722 million).

Warn said Husqvarna was increasingly looking to focus on the professional, as well as residential, part of that market.

$1 = 9.7017 Swedish crowns Reporting by Anna Ringstrom and Johannes Hellstrom; Editing by Niklas Pollard and Mark Potter

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