Pricing holding up, supports margins

Q1'24 adj. EBIT 1% and 7% above ABGSCe and consensus. Good pricing, expect flat pricing from here, supports margins. We raise '24e-'26e adj. EBIT by 2-3%, reiterate BUY and SEK 360 TP.

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

Good Q1 trigger consensus upgrades

Heads-up for report 17 April

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.

High margins despite declining volumes

Q1'24 report due on 17 April at 7:20 CET. Higher Truck ASP offsets lower volumes. Maintain BUY and SEK 360 TP, trades at ~7x '24e EV/EBIT.

The Capital Goods Data Miner - March 2024

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

Positive earnings revisions to continue

Solid pricing and better than expected demand. We raise '24e-'25e adj. EBIT by 7-9%, +14% vs. most recent '24e cons. Keep BUY, raise TP to SEK 360 (310), revisions to drive the share.

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.

Good NA demand highlights upside to estimates

Positive guidance from Daimler Truck

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.

Good January ACT orders

Underlying truck margin in good shape

Q4 adj. EBIT 2% and 4% above ABGSCe and consensus. Underlying margins higher on one-time items in Trucks. Keep BUY, raise TP to SEK 310 (300), trading at ~6x '24e EV/EBIT.

Good Q4 result and DPS proposal

Heads-up for report 26 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.

Time to hand out some of the excess cash

Q4'23 report due on 26 January at 7:20 CET. ABGSCe Q4 EBIT up 48% y-o-y, with a margin of 12.7%. Forecasts relatively unchanged, keep BUY, trading at ~6x EV/EBIT.

The Capital Goods Data Miner – January 2024

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