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On Tuesday, Deutsche Bank (ETR:DBKGn) analyst John Kim increased the price target on Sandvik AB (SAND:SS) (OTC:SDVKY) to SEK214.00, up from the previous SEK203.00, while maintaining a Buy rating on the shares. The adjustment followed Sandvik’s 2025 Capital Markets Day, which took place earlier in the week in Gimo, Sweden.
Kim’s remarks highlighted an improved understanding of Sandvik’s growth strategy and market positioning after the event. He noted the company’s restructure of its Sandvik Materials Technology (SMM) into two divisions, acknowledging the move as beneficial, although not a game-changer. According to Kim, Sandvik is poised to capitalize on structural growth trends in hard-rock mining, with the company’s revenue compound annual growth rate (CAGR) target of over 7% from 2025 to 2030, supported by its mining and rock solutions (SMR) and rock processing solutions (SRP) divisions.
While the current year’s estimates remain unchanged, Kim has revised the forward-year estimates for the group’s orders, revenue, and adjusted EBITA margin. This update takes into account the new guidance provided on the divisions during the Capital Markets Day. Key takeaways include Sandvik’s plans for an additional SEK1 billion in cost reductions and a continued focus on inorganic growth, which could contribute to approximately 30% of the group’s revenue growth by 2030, provided management successfully executes the plan.
The analyst’s perspective underscores Sandvik’s need to persist in mergers and acquisitions (M&A) and cost management initiatives, especially within the SMM division, which faces structurally lower growth opportunities compared to other segments. Sandvik’s management team has outlined a strategy that involves both organic growth and strategic acquisitions to bolster its market position.
Overall, the revised price target reflects Deutsche Bank’s confidence in Sandvik’s strategic initiatives and its potential for sustained growth in the coming years. The company’s focus on expanding its product offerings and optimizing operations is expected to drive performance and shareholder value, as outlined in their long-term financial targets.
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