J.P. Morgan turns bullish on mining, upgrades Sandvik to “overweight”

Published 08/10/2025, 12:16
© Reuters.

Investing.com -- J.P. Morgan has raised its outlook for the mining sector and upgraded Sandvik AB to “overweight” from “neutral,” citing strong momentum in orders and favorable exposure to key commodities such as gold and copper, in a note dated Wednesday.

The analysts said they maintain a “ bullish view on the Mining end-market,” underpinned by elevated metal prices and a robust pipeline of new projects. 

The brokerage’s analysis identified 268 upcoming copper developments that could drive about $230 billion in capital expenditures between 2025 and 2030, suggesting solid demand for mining equipment and aftermarket services.

Sandvik , which now becomes J.P. Morgan’s preferred upstream and gold play, has been outperforming peers in securing orders. 

The analysts said the company’s exposure to gold, roughly 37% of its business compared with an industry average near 25%, has helped boost order growth. 

Sandvik’s valuation was also cited as attractive, trading at a 2026 price-to-earnings ratio of 19.3× versus rival Epiroc’s 25.4×, despite similar earnings growth forecasts.

J.P. Morgan increased its December 2026 price target for Sandvik to SEK 310 from SEK 230, implying a 16% upside from the share’s closing price of SEK 266.10 on Oct. 7. 

The brokerage noted that Sandvik’s short-cycle businesses are likely to face fewer headwinds as European manufacturing purchasing managers’ indexes approach 50, signaling stabilization.

The analysts also said the company’s mining division is being undervalued based on sum-of-the-parts analysis.

They estimate Sandvik’s mining business could justify a higher earnings multiple given its strong growth prospects and margin improvement potential.

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