Atlas Copco (Hold, TP: SEK150.00) - Report rally has gone too far
Atlas Copco’s Q1 report was strong, and we have raised our adj. EBIT by 7–11% for 2023–2025e and increased our target price to SEK150 (135). However, we reiterate our HOLD and believe the near-term risk/reward has become more negatively skewed after the shares rallied over 14% on the report. Given how poorly other sector companies have reacted to strong results, we find this move unjustified, making the shares fully valued, in our view.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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