Atlas Copco A: Semiconductor capex and a potential short-cycle uptick overpower our structural concerns. Upgrade to Neutral.

Research evidence excerpt

Atlas Copco A: Semiconductor capex and a potential short-cycle uptick overpower our structural concerns. Upgrade to Neutral.

/28E 6.22 7.57 22 7.45

VT orders have historically tracked semi capex closely, and we are increasingly optimistic Andre Kukhnin

on the capex cycle. Recent semi equipment commentary points to accelerating orders, Analyst

while strong memory pricing and sustained data centre demand are driving capacity andre.kukhnin@ubs.com

expansion. Our Tech Hardware team forecast wafer fab equipment capex growth of +44-20-7567 2162

+27%/+35%/+25% in 26E/27E/28E. Reflecting this backdrop, we raise our VT order Ed Hussey

growth assumptions to +24%/+27%/+18%, from +22%/+9%/+5% previously. Analyst

edward.hussey@ubs.com

Raising Compressor Technique forecasts on an improving short-cycle backdrop +44-20-7568 3946

Our latest short-cycle indicator is signalling a more positive backdrop for industrial Gabriel Huber

demand. Our short-cycle indicator currently stands at 1.06x (see our latest publication Associate Analyst

gabriel.huber@ubs.comhere) and has remained sustainably around this level for the past five months, the first

+44-20-7883 0295

time since 2022. Consequently, we are raising our near-term expectations for CT and

turning more positive on short-cycle markets.

Valuation:

Valuation is rather full (24% above historical average, 60% premium vs sector vs 30%

average) but we see it as justified given VT and short-cycle outlook. We raise our PT to

195 SEK, reflecting a higher multiple in our SOTP and higher earnings forecasts.

Highlights (SKrm) 12/23 12/24 12/25 12/26E 12/27E 12/28E 12/29E 12/30E

Revenues 172,664 176,771 168,343 178,230 199,563 215,620 227,898 239,601

EBIT (UBS) 37,091 38,166 34,114 37,317 43,319 47,973 51,507 54,873