Epiroc (Hold, TP: SEK109.00) - Fairly valued
We have downgraded our recommendation on Epiroc to HOLD since there is only 7% upside to our DCF-based SEK109 (105) target price. We also note that key metal prices have declined significantly in recent months, creating some uncertainty for demand in the short to medium term while Epiroc shares have outperformed peers by c18–23%. We still see a compelling long-term investment story in Epiroc but given a 15.5x 2018e EV/EBIT multiple and some uncertainty regarding demand, we see limited upside.
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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