Atlas Copco: Upbeat Organic Growth Outlook Reaffirmed at 2024 Capital Markets Day

We retain our SEK 145 fair value estimate for wide-moat Atlas Copco as it announced no change to the group’s strategy or financial targets at its 2024 capital markets day. Atlas Copco continues to eye significant organic growth opportunities across each of its four divisions with its research and development program—to which the group allocates approximately 4% of sales annually—remaining the group’s key long-term growth support. The group’s R&D efforts aim to further increase the size of its divisions’ addressable markets via the launch of new products and innovation that improves its existing equipment offering while also broadening the application range of its products. We expect these opportunities to support strong growth over the coming decade, with our respective forecast 10-year EBIT and EPS CAGRs of about 9% and 10% remaining intact.