SKF (Buy, TP: SEK220.00) - A shimmer of light in the darkness
SKF’s Q1 report has left us a bit more optimistic about 2022 as good price realisation seems to have offset cost inflation well. The mid-point of the new organic growth guidance for 2022 of 4–8% (previously 5–10%) still implies slight upside potential to our 5.3% estimate. We reiterate our BUY and have lifted our target price to SEK220 (215) on our 6–5% higher 2022–2023e adj. EBIT. Investor sentiment in SKF is quite negative but we believe Q1 was a good step in the right direction.AB SKF is the parent company of the SKF Group, which supplies products, solutions and services within rolling bearings, seals, mechatronics, services and lubrication systems. Services include technical support, maintenance services, condition monitoring, asset optimization, engineering consultancy and training. Co.'s business areas are: SKF Industrial Market - Strategic Industries, which includes bearings and bearing accessories and lubrication systems; SKF Industrial Market - Regional Sales and Service, which develops SKF Solution Factory facilities providing engineering capability; and SKF Automotive, which develops and manufactures bearings, seals and related products and services.
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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