Atlas Copco (Hold, TP: SEK155.00) - No room for error
We expect underlying momentum to have stayed strong in Q2 and are 3–5% above consensus on orders, sales and adj. EBIT. However, at a 2023e EV/EBIT of 20.7x and after the share-price rally that has followed the Q1 results, we see no room for error and the near-term risk/reward as tilted towards the negative. We reiterate our HOLD but have increased our target price to SEK155 (150) after raising our 2023–2025e adj. EBIT 1–4% (mainly on FX).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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