Sandvik AB

SAND: XSTO (SWE)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
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Sandvik Earnings: Decline in Sales Volumes Sends Adjusted EBITA 7% Lower; Fair Value Maintained

Matthew Donen

Oct 21, 2024

Narrow-moat Sandvik reported a 7% decline in its adjusted EPS to SEK 2.94 during the third quarter, missing FactSet consensus of SEK 3.07 per share. We attribute the underperformance to lower sales volumes, most notably for its macroeconomic-driven short-cycle cutting tools business, which underpinned a 70-basis-point fall in its adjusted EBITA margin to 19.4%. Several restructuring programs have already been implemented to restore its EBITA margin to between Sandvik’s 20%-22% midterm target. Shares are trading broadly in line with our SEK 210 fair value estimate, which we maintain.

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Sandvik AB

Sandvik Earnings: Decline in Sales Volumes Sends Adjusted EBITA 7% Lower; Fair Value Maintained

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