Epiroc AB Ordinary Shares - Class A

EPI A: XSTO (SWE)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	SEK 347.00	Znpxsr	Ytyvgtxm

Epiroc's Third Quarter Show Signs of Slowdown in Demand for Mining Equipment

Matthew Donen

Oct 26, 2022

Narrow-moat Epiroc managed to deliver a decent third quarter, reporting 12% organic revenue growth and a 50-basis-point improvement in adjusted operating margin. A 10% decline in organic order intake should not be exaggerated as significant weakness; if we exclude SEK 1 billion of canceled Russian orders, it translates into organic growth of 5%. However, the market does appear to be slightly disappointed by the rate of growth, which lagged nearest competitor Sandvik and is a sequential decrease of 7%. We maintain our SEK 143 fair value estimate and view the shares as marginally overvalued.

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