Report
Olof Larshammar
EUR 813.02 For Business Accounts Only

Sandvik (Buy, TP: SEK190.00) - Set to continue to beat estimates

We reiterate our BUY recommendation and have raised our target price to SEK190 (185) following our EBIT forecast increase of 2–3%, driven by higher growth in SMS and SMT. Our investment case is based on our EBIT forecast being 6–9% above consensus, new financial targets during H2 2018 or H1 2019, the split of Atlas Copco and M&A possibly triggering a higher valuation for Sandvik, and that we find the valuation attractive, in particular versus Atlas Copco.
Underlying
Sandvik AB

Sandvik is organized into five business areas: Sandvik Mining, Sandvik Machining Solutions, Sandvik Materials Technology, Sandvik Construction and Sandvik Venture. Sandvik Mining specializes in equipment, tools and service for the mining industry. Sandvik Machining Solutions focuses on tools and tooling systems for metal cutting. Sandvik Materials Technology specializes in products made from stainless steel grades and special alloys. Sandvik Construction specializes in equipment, tools and service for the breaking, drilling and crushing niches. Sandvik Venture generates value by promoting growth of small and medium-sized businesses of particular interest to the Sandvik Group.

Provider
DnB Markets
DnB Markets

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.

 

Analysts
Olof Larshammar

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