Epiroc (Buy, TP: SEK230.00) - Mix headwind, benefits to come
Similar to Sandvik’s Mining business, the main miss in Epiroc’s Q1 was the soft margin, albeit for different reasons. Sandvik pointed to the unfavourable timing of equipment deliveries, while Epiroc alluded to a pure mix issue (high share of equipment, low share of service). Only small benefits from Epiroc’s cost measures have started to show – we expect more to be gradually realised through 2024. We have trimmed our 2024–2026e adj. EBIT by 1% on average. We reiterate our BUY, but have lowered our target price to SEK230 (235).
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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