Rating Change and Target Update
Kepler Cheuvreux downgraded Sandvik AB to "hold" from "buy" after the company's shares rallied approximately 70 % over the past twelve months. The broker simultaneously raised its target price to 400 Swedish crowns from 370 crowns, an 8.1 % increase, and highlighted that the stock now trades at a 13 % discount to its Nordic quality peers, compared with a five‑year average discount of 25 %.
Business Outlook
Analyst Nicklas Koller described Sandvik as a high‑quality asset with a portfolio increasingly weighted toward mining, aftermarket and software, and less dependent on short‑cycle industrial demand. The downgrade precedes the release of Sandvik’s second‑quarter results scheduled for 17 July. Kepler expects the quarter to be solid, driven by mining strength and a tungsten‑related boost in machining, but cautions against extrapolating current machining momentum beyond 2026.
Q2 Forecasts
Kepler models 21 % organic order growth and 20 % organic sales growth for the quarter, with adjusted EBITA of 7.8 billion crowns, broadly in line with consensus on orders and sales but below consensus on EBITA. For the mining segment, organic order and sales growth are projected at 15 % with an EBITA margin of 21.8 %. For machining, organic order growth of 35 % and sales growth of 30 % are expected, delivering an EBITA margin of 25.4 % versus 18.4 % previously.
Longer‑Term Estimates
The brokerage raised its 2026 sales estimate by 12.6 % and its 2027 sales estimate by 21.8 %. Adjusted EBIT forecasts were increased by 25.0 % for 2026 and 30.5 % for 2027, while adjusted earnings‑per‑share estimates were lifted by 25.1 % for 2026 and 30.5 % for 2027.