Epiroc (Buy, TP: SEK116.00) - Approaching trough earnings
We reiterate our BUY but have cut our target price to SEK116 (117). We expect trough earnings in Q2, to which we believe investors will assign higher valuation multiples as equipment orders are close to trough levels and underlying demand still appears solid at spot metal prices in our view. We have cut our 2020–2021e EBIT by 1–2% and we like Epiroc’s best-in-class EBIT stability, leading position in a niche market set to outgrow underlying mining capex and opex long-term, as well as its strong balance sheet.
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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