Sandvik (Buy, TP: SEK270.00) - Focus on growth
Sandvik’s CMD underscored that the company is increasing its focus on growth (it raised its growth target to 7% organic + M&A through the cycle with a 2025 ambition that implies c13% CAGR until then). We reiterate our BUY and have increased our target price to SEK270 (265) after raising our adj. EBITA by 2% for 2022e and c5% for 2022–2023e (driven by FX, M&A and cost savings). We believe the planned SMT spin-off in Q3 could be the next positive share-price trigger.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.
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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