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.

Strong stock has only partly caught up

Q1 results due on 25 April at 8:00 CET. We est. orders -10%, sales -2%, EBITA margin 16.7% (15.8%). Orders down in Q1 but back to growth in Q2; stock still cheap. BUY.

The Capital Goods Data Miner - March 2024

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

The Capital Goods Data Miner - February 2024

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

In this case, in line is positive

In-line orders and improved service and outlook surprise. Adj. EBITA'24-25 +0-1%, consensus looks cautious. Cash flow still a sore spot, but strong value support.

Order relief

Heads-up for report 16 February

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.

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.

Orders in soft patch; bound to improve in H1

Q4 results due on 16 February at 8:00 CET. We est. orders -12%, sales -1%, EBITA margin 15.7% (15.5%). Air pocket for orders, but market fundamentals support cheap stock.

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.

Mining soft patch mild and (probably) short-lived

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.

Q3 tripped on most lines

Slightly below on orders, margins and cash flow. Adj. EBITA downgraded 2-4%. Not the quarter to trigger the potential value release.

No order rebound

Heads-up for report 27 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.