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Sandvik AB ADR SDVKY

Morningstar Rating
$22.28 +0.22 (1.00%)
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Company Report

Sandvik Earnings: Operating Profit Falls 14%; Restructuring Measures Set to Restore Profitability

Narrow-moat Sandvik reported a 14% decline in its adjusted operating profit during the first quarter. Lower volumes, against a high comparable, were the main reason for the fall in profitability, which saw its adjusted EBITA margin decrease 160 basis points to 18.2%. We aren’t overly concerned by the drop in profitability as we believe it has several measures in place such as cost-saving initiatives and secular growth in its mining division, which we anticipate will help Sandvik return to its EBITA margin target of between 20% and 22%. We maintain our SEK 210 fair value estimate and view shares as fairly valued

Price vs Fair Value

SDVKY is trading at a 75% premium.
Price
$22.28
Fair Value
$95.00
Uncertainty
High
1-Star Price
$58.00
5-Star Price
$22.00
Economic Moat
Nnckmwy
Capital Allocation
Gsvnlhz

Bulls Say, Bears Say

Bulls

Sandvik is able to utilize its leading market position and close relationships with customers to gain a greater share of wallet as it expands its product offering into faster-growing segments.

Bears

Sandvik's healthy balance sheet may see the group overpay for acquisitions to enhance the group's growth profile, given the structural headwinds of some of its end markets.

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News

Trading Information

Previous Close Price
$22.06
Day Range
$22.1022.32
52-Week Range
$16.3123.50
Bid/Ask
$22.06 / $22.33
Market Cap
$27.95 Bil
Volume/Avg
35,578 / 119,207

Key Statistics

Price/Earnings (Normalized)
22.99
Price/Sales
2.36
Dividend Yield (Trailing)
2.30%
Dividend Yield (Forward)
2.30%
Total Yield
2.36%

Company Profile

Sandvik is a manufacturer of specialized tools and mining equipment used predominantly by global mining, engineering, and automotive customers. The company’s core operations are in metal cutting and mining equipment. The company has a well-documented history, having been founded in 1862 and listed on the Nordic Exchange in Stockholm in 1901.
Sector
Industrials
Industry
Specialty Industrial Machinery
Stock Style Box
Large Core
Total Number of Employees
40,614

Competitors

Valuation

Metric
SDVKY
ATCO A
CAT
Price/Earnings (Normalized)
22.9933.7115.93
Price/Book Value
3.179.589.68
Price/Sales
2.365.712.65
Price/Cash Flow
12.6829.0813.62
Price/Earnings
SDVKY
ATCO A
CAT

Financial Strength

Metric
SDVKY
ATCO A
CAT
Quick Ratio
0.801.020.73
Current Ratio
1.641.591.35
Interest Coverage
8.3240.4426.54
Quick Ratio
SDVKY
ATCO A
CAT

Profitability

Metric
SDVKY
ATCO A
CAT
Return on Assets (Normalized)
8.51%15.13%13.02%
Return on Equity (Normalized)
17.33%31.04%59.16%
Return on Invested Capital (Normalized)
12.40%22.70%19.73%
Return on Assets
SDVKY
ATCO A
CAT
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