Atlas Copco (Buy, TP: SEK170.00) - Solid story lacking execution
The Q1 report was a bit soft, with orders in line, adj. EBIT 5% below consensus and a reduction of the outlook, now expecting weaker customer activity near-term. VT not missing consensus orders and margins was a relief, and a restructuring of the division is underway, with full margin recovery expected by 2026. Having trimmed our organic growth and adj. EBIT margin assumptions, we have lowered our 2025–2027e adj. EBIT by c3% on average. We reiterate our BUY, but have lowered our target price to SEK170 (180).Atlas Copco provides industrial productivity products and services. Co.'s operations are divided into four business areas: Compressor Technique (provides compressors, vacuum solutions, gas and process compressors and expanders, air and gas treatment equipment and air management systems), Industrial Technique (provides power tools, assembly systems, quality assurance products, software and service through a global network), Mining and Rock Excavation Technique (provides equipment for drilling and rock excavation), and Construction Technique (provides construction and demolition tools, portable compressors, pumps and generators, lighting towers, and compaction and paving equipment).
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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