SKF's Fourth-Quarter Margin Under Pressure from Supply Chain Shortages

SKF shares were down nearly 9% at the time of writing after reporting adjusted operating profits below the company's provided consensus. Relative to our forecasts, the SEK 81.7 billion in revenue and 13.3% adjusted operating profit margin was in line with our expectations. With the sell-off, shares are trading at a 9% discount to our SEK 210 fair value estimate. Near-term cost pressures from supply chain shortages are likely to persist, and management's strategy path to double revenue by 2030 remains elusive. We maintain our narrow moat rating.