Raising Our FVE After Epiroc Post Strong Q1 Order Growth; Shares Remain Richly Valued

We raise our fair value estimate for narrow-moat Epiroc to SEK 125 per share from SEK 109 as we revise our forecasts to incorporate better-than-expected organic order growth of 21% in the first quarter. While we estimate that growth lagged behind Sandvik, favorable commodity prices have supported a high level of demand for mining equipment and services, which the group expect will remain stable in the near term. The share price has rallied 95% in the past year and is currently trading at 35 times our 2021 earnings estimate, which we view as excessive despite the current favorable market outlook and additional capital return investors will receive this year.