Sandvik AB
SAND: XSTO (SWE)
Morningstar Rating for Stocks | Fair Value | Economic Moat | Capital Allocation |
---|---|---|---|
SEK 125.00 | Msxynx | Nwtbnwh |
Strong Start to the Year for Sandvik; Shares Are Fairly Valued
We expect to moderately raise our SEK 193 fair value estimate for narrow-moat Sandvik following a strong start to the year. There were a number of moving parts behind first-quarter revenue growth of 35% and operating profit growth of 23%, due to the proposed distribution and listing of the materials technology segment and a significant contribution from 14 prior-year acquisitions. Nevertheless, the core operations of the group remain robust, delivering organic order intake and organic revenue growth of 13% and 9%, respectively. We view shares as fairly valued.