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

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.

Easter effect holding back sales

Q1'24 report due on 24 April. Limited est changes, Q1 held back by Easter, to reverse in Q2. Maintain HOLD, raise TP to SEK 375 (325) on higher TP multiple.

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.

Small adjustments after Q4

Solid Q4 numbers and guidance. We lower '24e-'25e adj. EBITA by ~2% on Sealing margins. Maintain HOLD and TP at SEK 325.

Q4 roughly in line, as is the guidance

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 run HOLDs back our excitement

Down to HOLD (Buy), TP SEK 325 (310). '23e adj. EBITA up 1%, down 2-3% '24e-'25e; 9% CAGR '22-'25e. Q4 report due 1 Feb, -1% org. growth, 8% adj. EBITA growth.

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.

Industrial Solutions took centre stage

2% adj. EBITA beat and comforting guidance, '23e-'25e adj. EBITA up 1-2%; 9% CAGR '22-'25e, keep BUY, TP SEK 310 unchanged

2% EBITA beat, but lower TSS margins and org. sales

Heads-up for report 26 October

Q3e: Controlled slowdown as sentiment bottoms out

Gently slowing demand, strong margins; estimates unchanged. Valuation now 10% lower than history, just as PMI's appear to bottom out. Look for short-cycle value, top picks Sandvik, SKF, Volvo.

Industrial grows, Sealing invests

Q3 report due on Thursday 26 October. 2023e-2025e adj. EBITA down 2-1%; 9% CAGR '22-'25e. Keep BUY, TP SEK 310 (300).