Epiroc Show No Signs of Slowing Down in 2022

We plan to moderately increase our SEK 132 fair value estimate for narrow-moat Epiroc following a strong first quarter. Its organic order intake grew 18% to a record SEK 13.8 billion, driven by an 18% increase for equipment and 22% for services. Equipment orders are typically converted into revenue between six and nine months, which will offer resilience against macroeconomic clouds on the horizon. We expect the structural shift in demand toward autonomous and digital equipment, which lowers the total cost of ownership and reduces customers carbon emissions will provide further resilience against any short-term headwinds. Sequentially, orders grew by 13%, emphasizing the strong environment and highlighting that there are no signs of a slowdown in demand for equipment and aftermarket activities. The favorable outlook is being incorporated in the shares, which we view as richly valued.