Atlas Copco Earnings: Shares Expensive Despite Weak Orders That Point to a Soft 2024

Wide-moat Atlas Copco’s fourth-quarter 2023 result underwhelmed, with weak new order intake falling short of our and the market’s expectations. Fourth-quarter order intake fell by a material 13% sequentially, leading full-year 2023 organic order intake for the group to finish flat year on year, trailing our full-year forecast for modest growth. Full-year organic revenue growth of 14% was also somewhat soft relative to our forecast of about 17%, with Atlas Copco’s delivery of orders in late 2023 tracking behind our expectations. Investors soured to Atlas Copco’s guidance that current weak demand conditions are likely to persist into early 2024, sending shares some 4% lower.