SKF (Hold, TP: SEK215.00) - Near-term gain, long-term mundane
We are 11–13% above consensus for Q1 and 2023e adj. EBIT, but reiterate our HOLD and SEK215 target price. Although we are optimistic about the company’s near-term results and see room for positive earnings revisions to consensus for 2023, we are roughly in line with consensus for 2024–2025e and struggle to get excited about the long-term equity story. SKF has guided for mid-single digit organic sales growth in Q1 YOY (consensus 4.8%, our estimate 7.2%) and 2023 (consensus 0.3%, our estimate 3.4%).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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