Epiroc AB "Valuation has gone too far. Downgrade to Sell" (Sell) Hussey

研报英文原文证据摘录

Epiroc AB "Valuation has gone too far. Downgrade to Sell" (Sell) Hussey

e is unlikely, particularly given the margin-dilutive nature of

From To % ch Cons.

acquisitions undertaken in recent years. 12/26E 7.74 7.80 1 8.31

12/27E 8.91 9.20 3 9.86

Risks to consensus 12/28E 10.14 10.59 4 10.89

While it is certainly possible that Epiroc delivers in line with consensus expectations, we

Ed Husseysee a number of downside risks. Firstly, we continue to see margin risks within

Analyst

Equipment & Services. Although Q1 2026 showed strong organic performance, we edward.hussey@ubs.com

believe this was largely driven by operating leverage, as Epiroc significantly ramped up +44-20-7568 3946

manufacturing output and absorbed fixed overheads. Should current production levels

Andre Kukhninprove unsustainable, we see downside risk to consensus margin assumptions. In

addition, we remain cautious on the service mix impact (as discussed in detail in our note andre.kukhnin@ubs.com

last year - see here), which we believe could continue to weigh on margins. Secondly, +44-20-7567 2162

consensus assumes relatively robust organic revenue growth in Equipment for FY26. We

Chinazom Chidolue, CFA

consider these expectations ambitious and do not foresee a meaningful acceleration in

HOLT Sector Specialist

revenues until 2027. chinazom.chidolue@ubs.com

+44-20-7888 3051

Valuation:

We value Epiroc using a DCF. This gives our 230 SEK price target. The 15% increase in

our PT is driven by a combination of an increase in our earnings estimates and a roll

forward of the valuation. Epiroc is currently trading on a fwd EV/EBIT of 22.4x, which is

+17% above the 5 year average.

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

Revenues 60,343 63,604 61,998 64,118 72,338 80,996 87,563 93,676