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Investing.com - BofA Securities upgraded SKF AB (OTC:SKFRY) from Neutral to Buy and raised its price target to SEK280.00 from SEK240.00, citing potential acceleration in sales and profit growth.
The upgrade reflects BofA’s view that SKF is positioned to benefit from improving European short-cycle momentum, with the company’s planned automotive division spin-off in 2026 expected to reduce the drag from that segment, which currently represents approximately 30% of sales and 10% of profits.
BofA Securities notes that post-spin-off, the remaining company could deliver higher growth through more focused management and merger and acquisition opportunities, despite currently trading at 12x 2026 estimated price-to-earnings ratio, in line with its 15-year historical average.
The new price target of SEK280 implies approximately 20% upside potential, with BofA’s valuation now including both price-to-earnings and discounted cash flow analyses.
BofA Securities maintains that despite the upgrade, Buy-rated Kion remains its top pick in the sector due to greater European exposure.
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