Atlas Copco Earnings: Despite Continued Weak End Markets, Atlas Reaches Record Revenues

Sales reached record levels in the third quarter of 2023, rising 17% year on year to SEK 44.5 billion from 38.1 billion as Atlas Copco continues to work through its 2022 backlog. New orders grew 5% in the quarter but fell 1% organically. The near-term sales outlook remains worrying as management anticipates customer activity to weaken in the near term, largely due to slowing demand in semiconductor end markets. Our 2023 financial estimates remain largely unchanged, as do our long-term expectations for the narrow-moat stock. Atlas Copco still screens as overvalued, trading at a 19% premium to our unchanged SEK 120 fair value estimate.