The Capital Goods Data Miner - April 2024

Our key long ideas are: Alfa Laval, Assa Abloy, Hexagon, Metso, Volvo. We are cautious on: Autoliv, Nibe, Wärtsilä

Heads-up for report 24 April

Steady sequential orders from VAT

Q1e: Toothless downcycle increasingly discounted

Flat earnings as bad as it gets in mild downturn. Deep-cyclicals now partly de-risked, so value opportunities fewer. Epiroc and Hexpol down to HOLD; prefer Alfa, Assa, Metso, Hexagon, Volvo.

No repeat of Q1 order jump expected

Q1 results due on 24 April at 11:00 CET. Return to normal seasonality, orders -12%, margin 22.0% (21.7%). Great long-term growth position at high 30x earnings.

The Capital Goods Data Miner - March 2024

Our key long ideas are: Alfa Laval, Assa Abloy, Volvo. We are cautious on: Autoliv, Saab, Wärtsilä.

One-offs - they rarely stop at one ('24 update)

Exceptional situations pass, new ones arise. XO items in 2023 a new record, 8% of adj. EBITA. Consistently low charges in NIBE, HPOL, ATCO, EPI, KONE.

The Capital Goods Data Miner - February 2024

Our key long ideas are: Alfa Laval, Assa Abloy, Volvo. We are cautious on: Autoliv, Wärtsilä.

Capital Goods: Post-Q4 Update

Outside of construction, most end-markets were solid, pricing and margins held up, and cash flow was strong. We think Alfa Laval, SKF and Volvo look attractive in H1’24.

Q4 orders drop, but fundamentals remain

Orders -9%, adj. EBIT +3%. Big q-o-q order drop, but resilience is strong: EPS -2%. Nearing chip turnaround, P/E 28x and TP 170 (160).

New seasonality or big sequential deterioration?

Heads-up for report 25 January

Q4e: Some cyclical upside realised, some left

Earnings hold up on big backlogs; PMIs have turned, but only slowly. Meanwhile, stocks have bounced, multiples back to normal. We favour Alfa Laval, Epiroc, Metso, SKF and Volvo.

Strong y-o-y growth against easy comparison

Q4 results due on 25 January at 12:00 CET. Against easy comps, we expect orders +9%, margin 22.0% (20.0%). Great long-term growth position at about fair value.

VAT orders improved in Q4

The Capital Goods Data Miner – January 2024

Our key long ideas are:Alfa Laval, Metso, Volvo. We are cautious on:Autoliv, Kone,Wärtsilä.

The Capital Goods Data Miner – December 2023

Our key long ideas are: Alfa Laval, Sandvik, SKF, Volvo. We are cautious on: Autoliv, Epiroc, Kone, Wärtsilä.

The Capital Goods Data Miner - November 2023

Our key long ideas are Sandvik, SKF, Volvo. We are cautious on Autoliv, Epiroc, Wärtsilä.

Capital Goods: Q3 trends, ests., valuation, top picks

Q3 again showed stronger margins, but slightly lower orders. Aggregate adj. EBIT’23-25 was unchanged. Sandvik, SKF and Volvo are top picks.

Least profitable BA now at 20% margin

Orders in line, margins beat across the board. Adj. EBIT'23e-25e +2-4%; VT still in doldrums but other BA's step up. Great long term, multiples cap short-term upside - HOLD