Report
Olof Larshammar
EUR 461.03 For Business Accounts Only

Sandvik (Hold, TP: SEK190.00) - Normalised valuation on 2022e

We have downgraded Sandvik to HOLD (BUY) but reiterate our SEK190 target price. We believe Sandvik has improved structurally; however, at current share price levels, a sharp earnings recovery appears priced in, with limited room for disappointments, as indicated by a strong Q2 report but the stock down 6% on the day. We also see a risk for a prolonged downturn in Sandvik’s O&G and aerospace segments, which together account for 15% of group sales.
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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