Epiroc (Hold, TP: SEK200.00) - Time for a breather
We like the long-term case in Epiroc with secular growth from lower ore grades, more and more underground mines, and electrification and digitalisation of equipment. However, we have downgraded the stock to HOLD with a SEK200 (210) target price. We expect near-term equipment order intake to weaken somewhat from the high Q1 levels. Additionally, increased political risk in Chile and Peru could lead to a lower likelihood for new projects. Lastly, the stock outperformed the OMXS30 by 8% YTD and by 46% over the last year, which has left the valuation at a relative high level.
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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