Epiroc AB Ordinary Shares - Class A
Morningstar Rating for Stocks | Fair Value | Economic Moat | Capital Allocation |
---|---|---|---|
SEK 166.00 | Mlwkqb | Nbjfpvxwm |
Epiroc's Third Quarter Show Signs of Slowdown in Demand for Mining Equipment
Narrow-moat Epiroc managed to deliver a decent third quarter, reporting 12% organic revenue growth and a 50-basis-point improvement in adjusted operating margin. A 10% decline in organic order intake should not be exaggerated as significant weakness; if we exclude SEK 1 billion of canceled Russian orders, it translates into organic growth of 5%. However, the market does appear to be slightly disappointed by the rate of growth, which lagged nearest competitor Sandvik and is a sequential decrease of 7%. We maintain our SEK 143 fair value estimate and view the shares as marginally overvalued.