reports
- Denise Molina
Morningstar | Sandvik Reports Weak Second Quarter; Shares Overvalued
No-moat Sandvik missed expectations on revenue and EBIT with flat year-over-year revenue and a 2% decline in adjusted EBIT. Orders were down 5% year over year. Similarly to other automotive suppliers so far this quarter, Sandvik saw a decline in demand from autos but also in general engineering. First-half revenue grew by 1%, below our 2% full-year forecasts. Full-year EBIT, however, is tracking in line with our full-year forecasts, as we have baked a slightly weaker margin than first-half res...
- Denise Molina
Sandvik Reports Weak Second Quarter; Shares Overvalued
No-moat Sandvik missed expectations on revenue and EBIT with flat year-over-year revenue and a 2% decline in adjusted EBIT. Orders were down 5% year over year. Similarly to other automotive suppliers so far this quarter, Sandvik saw a decline in demand from autos but also in general engineering. First-half revenue grew by 1%, below our 2% full-year forecasts. Full-year EBIT, however, is tracking in line with our full-year forecasts, as we have baked a slightly weaker margin than first-half res...
- Denise Molina
Morningstar | Sandvik Reports Solid 1Q
No-moat Sandvik reported in-line first-quarter results with most end markets showing stable order growth aside from automotive. With a turn in the cycle being top of mind for markets, Sandvik's management echoed sentiments we have heard from other European capital goods suppliers in the quarter so far, namely a more cautious outlook for 2019 versus 2018 largely due to geopolitical risks, including trade wars and Brexit. Aside from the automotive sector, order book growth for companies in our uni...
- Denise Molina
Sandvik Reports Solid 1Q
No-moat Sandvik reported in-line first-quarter results with most end markets showing stable order growth aside from automotive. With a turn in the cycle being top of mind for markets, Sandvik's management echoed sentiments we have heard from other European capital goods suppliers in the quarter so far, namely a more cautious outlook for 2019 versus 2018 largely due to geopolitical risks, including trade wars and Brexit. Aside from the automotive sector, order book growth for companies in our uni...
- Denise Molina
Morningstar | Sandvik's 2018 In Line; Some End Markets Show Signs of S...
Sandvik reported full-year results in line with our revenue and profit forecast. The share price looks rich to us at current levels. Sandvik has been enjoying what we think is peak cyclic order growth, which seems to be softening from automotive end markets in Europe and China, where the company also saw a weakening in demand from general engineering customers. We are maintaining our SEK 111 fair value estimate and no-moat rating. We believe the key difference between our forecasts and consensus...
- Denise Molina
Sandvik's 2018 In Line; Some End Markets Show Signs of Softness; Share...
Sandvik reported full-year results in line with our revenue and profit forecast. The share price looks rich to us at current levels. Sandvik has been enjoying what we think is peak cyclic order growth, which seems to be softening from automotive end markets in Europe and China, where the company also saw a weakening in demand from general engineering customers. We are maintaining our SEK 111 fair value estimate and no-moat rating. We believe the key difference between our forecasts and consensus...
- Denise Molina
Morningstar | Sandvik Has Early Cycle Exposure to Economic Downturns
Sandvik has two core competencies: developing and manufacturing premium metal-cutting inserts and specialised rock excavation equipment. In the 1940s, Sandvik was one of the first companies in the world to offer cemented carbide cutting tools. This was revolutionary, as it replaced steel, which was less reliable and would wear down quickly. In excavation in the 1960s, Sandvik's drill bits helped to carve out the Mont Blanc tunnel.Today, the company operates three divisions, but not all of these ...
- Denise Molina
Sandvik Has Early Cycle Exposure to Economic Downturns
Although Sandvik's third quarter looked strong without signs of a slowdown, we view this year as peak demand. The company has been growing above midcycle levels for seven quarters since the trough in 2016, and year-over-year comparables are becoming increasingly tougher. Its end markets, including mining, automotive, and construction, are highly cyclical, and many of its products are delivered within 24 hours of being ordered, so visibility from one quarter to the next can be pretty poor. In add...
- Denise Molina
Morningstar | Sandvik's 3Q Shows No Signs of Major Turn in Cycle Yet
Although Sandvik's third quarter looked strong without signs of a slowdown, we view this year as peak demand. The company has been growing above midcycle levels for seven quarters since the trough in 2016, and year-over-year comparables are becoming increasingly tougher. Its end markets, including mining, automotive, and construction, are highly cyclical, and many of its products are delivered within 24 hours of being ordered, so visibility from one quarter to the next can be pretty poor. In add...
- Denise Molina
Morningstar | Sandvik's Recent Margin Expansion Should Partly Outlast ...
Sandvik's first half 18.7% EBIT margin positively surprised us relative to our 17.2% margin forecast for the full year. Restructuring efforts and divestitures of low margin businesses have expanded margins greater than we factored into our model. As a result, we have increased our fair value estimate to SEK 111 from SEK 104 for the local shares and to USD 12.60 from USD 11.90 for the ADR. Most of the increase comes from increasing our midterm EBIT margin by 50 basis points to 15.6%. However, we ...
- Denise Molina
Morningstar | Sandvik's Recent Margin Expansion Should Partly Outlast ...
Sandvik's first half 18.7% EBIT margin positively surprised us relative to our 17.2% margin forecast for the full year. Restructuring efforts and divestitures of low margin businesses have expanded margins greater than we factored into our model. As a result, we have increased our fair value estimate to SEK 111 from SEK 104 for the local shares and to USD 12.60 from USD 11.90 for the ADR. Most of the increase comes from increasing our midterm EBIT margin by 50 basis points to 15.6%. However, we ...
- Denise Molina
Sandvik's Recent Margin Expansion Should Partly Outlast the Cycle but ...
Sandvik's first half 18.7% EBIT margin positively surprised us relative to our 17.2% margin forecast for the full year. Restructuring efforts and divestitures of low margin businesses have expanded margins greater than we factored into our model. As a result, we have increased our fair value estimate to SEK 111 from SEK 104 for the local shares and to USD 12.60 from USD 11.90 for the ADR. Most of the increase comes from increasing our midterm EBIT margin by 50 basis points to 15.6%. However, we ...
- Denise Molina
Sandvik is benefiting from an upturn in the cycle and restructuring sa...
Sandvik posted solid first-quarter results. Comparable year-ago figures will be less flattering for the remainder of the year, likely leading to slower growth; nonetheless, we anticipate making adjustments to our full-year forecasts, with potentially up to a 5% upward impact to our SEK 93.50 and $11.90 fair value estimates for the local and ADR shares, respectively. We retain our no-moat rating and find the shares overvalued. Looking through to the divisions, machining (insert metal cutting) was...
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