Sandvik (OM:SAND) Valuation Check After Major Mining Equipment Wins at Eldorado Gold and Northern Star
Sandvik (OM:SAND) has secured two sizeable mining equipment deals, including battery electric vehicles for Eldorado Gold's Lamaque mine and a major underground fleet order from Northern Star Resources, reinforcing demand for its mining solutions.
See our latest analysis for Sandvik.
These back to back mining wins arrive as Sandvik's share price trades around SEK 295.7, with strong upward momentum reflected in a roughly 47% year to date share price return and a robust multi year total shareholder return profile.
If these contract wins have you thinking about where else capital equipment demand might show up, it could be worth scanning aerospace and defense stocks for other industrial names with structural tailwinds.
With the shares now slightly above consensus targets after a powerful multiyear run, investors must decide whether Sandvik is still trading at a discount to its long-term mining upside or whether the market has already priced in that growth.
Most Popular Narrative Narrative: 4.7% Overvalued
With Sandvik closing at SEK 295.7 against a narrative fair value near SEK 282.6, the story leans slightly rich, hinging on disciplined growth assumptions.
The analysts have a consensus price target of SEK241.556 for Sandvik based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of SEK275.0, and the most bearish reporting a price target of just SEK161.0.
Curious how modest revenue growth, rising margins and a lower future earnings multiple can still justify today’s premium price tag, and beyond? See the full playbook.
Result: Fair Value of $282.56 (OVERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, lingering macro softness in cutting tools and automotive demand, plus geopolitics driven supply chain disruption, could quickly challenge today’s upbeat, mining-led narrative.
Find out about the key risks to this Sandvik narrative.
Build Your Own Sandvik Narrative
If you are not fully aligned with this view or want to dig into the numbers yourself, you can build a custom narrative in minutes: Do it your way
A great starting point for your Sandvik research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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