Morningstar

Epiroc AB Ordinary Shares - Class A EPI A

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Stock XSTO Rating as of
SEK 214.70 +8.70 (4.22%)
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As of Delayed Price Closed

Company Report

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Epiroc Is an Enabler of the Decarbonization Megatrend; Raising Our Fair Value Estimate to SEK 180

Matthew Donen

Epiroc has managed to enjoy superior operating metrics and greater resilience than competitors within the mining supply chain through its track record of innovative mining solutions and recurring aftermarket revenue. By specializing in niche equipment, which has high aftermarket requirements, Epiroc is less dependent on uncontrollable and cyclical factors such as commodity prices to drive demand. Differentiation in drilling equipment and underground trucks has been achieved through specialized knowledge via investment into research and development, or R&D, and strong customer relationships. One third of its orders are to copper mines, a key metal to help decarbonize several industries.

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Price vs Fair Value

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EPI A is trading at a 285% premium.
Price
SEK 214.70
Fair Value
SEK 889.00
Uncertainty
Medium
1-Star Price
SEK 517.00
5-Star Price
SEK 875.00
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

The expansion of Epiroc's aging installed base of equipment provides a lengthy runway opportunity to perform higher-margin services.

Bears

Improved productivity through remote autonomous equipment may lead to sales cannibalization of Epiroc’s spare parts business and will require new revenue streams.

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Trading Information

Previous Close Price
SEK 206.00
Day Range
SEK 208.60–216.70
52-Week Range
SEK 179.50–232.10
Bid/Ask
SEK 214.30 / SEK 214.60
Market Cap
SEK 259.38 Bil
Volume/Avg
1.6 Mil / 771,473

Key Statistics

Price/Earnings (Normalized)
26.90
Price/Sales
4.07
Dividend Yield (Trailing)
1.75%
Dividend Yield (Forward)
1.84%
Total Yield
1.75%

Company Profile

Epiroc is a global manufacturer of niche equipment and services used by mining and infrastructure customers. The company’s products include hard rock drilling equipment and excavation technologies for underground and surface mining, as well as servicing and spare parts. Approximately 69% of group sales are from the aftermarket, which includes services and the sale of spare parts and consumables. Epiroc was spun out of Atlas Copco and listed as a stand-alone company on the Nasdaq Stockholm in June 2018.
Sector
Industrials
Industry
Farm & Heavy Construction Machinery
Stock Style Box
Large Core
Total Number of Employees
19,081
Website
https://www.epirocgroup.com

Competitors

Valuation

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Metric
EPI A
CAT
SAND
Price/Earnings (Normalized)
 26.9017.5018.06
Price/Book Value
 6.6011.073.08
Price/Sales
 4.072.962.21
Price/Cash Flow
 22.8814.8612.46
Price/Earnings
EPI A
CAT
SAND

Financial Strength

Metric
EPI A
CAT
SAND
Quick Ratio
 1.050.690.84
Current Ratio
 1.991.281.58
Interest Coverage
 26.7925.746.30
Quick Ratio
EPI A
CAT
SAND

Profitability

Metric
EPI A
CAT
SAND
Return on Assets (Normalized)
 11.23%13.12%8.37%
Return on Equity (Normalized)
 22.18%60.21%17.00%
Return on Invested Capital (Normalized)
 15.76%19.89%12.08%
Return on Assets
EPI A
CAT
SAND

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