Atlas Copco (Buy, TP: SEK260.00) - Short-term volatility in Vacuum
We reiterate our BUY but have cut our target price to SEK260 (288) on 4–7% lower 2018–2020e EBIT. Order intake in semiconductor equipment dropped c40% in Q3 YOY, a similar magnitude to the peak-to-trough average capex decline during the past three downturns. Key semiconductor manufacturers expect growth in capex in 2019, which should support the 2019 outlook for Vacuum Technique. We also see support for the shares from a solid balance sheet, best-in-class earnings stability, and attractive valuation.
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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