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Epiroc AB Ordinary Shares - Class A EPI A

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Stock XSTO Rating as of
SEK 263.60 +5.10 (1.97%)
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Epiroc's Installed Base of Equipment Creates the Opportunity to Earn High-Margin Aftermarket Sales

Matthew Donen

Epiroc has enjoyed superior operating metrics and greater resilience than competitors in the mining supply chain through its focus on niche mining equipment used in harsh operating conditions with high aftermarket requirements. Half of the group's revenue is from servicing equipment, which makes Epiroc less dependent on uncontrollable and cyclical factors such as commodity prices to drive demand. Its direct sales model and extensive global sales network have resulted in close customer relationships, fostering future product innovation and creating high barriers to entry. Over one-fourth of its orders are from copper production, a key metal to help decarbonize several industries. Gold is the second-largest commodity, representing 23% of group orders.

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Price vs Fair Value

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EPI A is trading at a LOCK|fysn premium.
Price
SEK 258.50
Fair Value
LOCK|PB
Uncertainty
LOCK|Ww>r
1-Star Price
rgx
5-Star Price
LOCK|d>
Economic Moat
LOCK|r>
Capital Allocation
LOCK|Vf!?^v!

Bulls Say, Bears Say

Bulls

Epiroc is a prime acquisition candidate, given the difficulty in replicating its specialized equipment and global service. It's also a pure-play supplier, unlike peers that are part of large corporations.

Bears

Improved productivity through remote autonomous equipment may lead to sales cannibalization of Epiroc’s spare-parts business and will require new revenue streams.

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Trading Information

Previous Close Price
SEK 258.50
Day Range
SEK 260.20–265.40
52-Week Range
SEK 186.60–284.30
Bid/Ask
SEK 263.40 / SEK 264.10
Shares Outstanding
1.21B
Market Cap
SEK 318.94B
Volume/Avg
1M / 1M

Key Statistics

Price/Earnings (Normalized)
33.79
Price/Sales
5.01
Dividend Yield (Trailing)
1.47%
Dividend Yield (Forward)
1.47%
Dividend Payment Schedule
May, Oct
Total Yield
1.47%

Company Profile

Epiroc is a global manufacturer of niche equipment and services used by mining and infrastructure customers. The company’s products include hard rock drilling equipment and excavation technologies for underground and surface mining, as well as servicing and spare parts. Approximately 69% of group sales are from the aftermarket, which includes services and the sale of spare parts and consumables. Epiroc was spun out of Atlas Copco and listed as a stand-alone company on Nasdaq Stockholm in 2018.
Sector
Industrials
Industry
Farm & Heavy Construction Machinery
Stock Style Box
Large Growth
Total Number of Employees
19,398
Website
https://www.epirocgroup.com

Competitors

Valuation

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Metric
EPI A
SAND
CAT
Price/Earnings (Normalized)
 33.7927.8134.69
Price/Book Value
 7.014.4819.59
Price/Sales
 5.013.485.17
Price/Cash Flow
 28.8916.6426.38
Price/Earnings
EPI A
SAND
CAT

Financial Strength

Metric
EPI A
SAND
CAT
Quick Ratio
 1.160.830.77
Current Ratio
 2.131.641.37
Interest Coverage
 21.5412.6127.32
Quick Ratio
EPI A
SAND
CAT

Profitability

Metric
EPI A
SAND
CAT
Return on Assets (Normalized)
 10.76%9.88%11.55%
Return on Equity (Normalized)
 20.86%18.50%56.29%
Return on Invested Capital (Normalized)
 14.77%13.30%18.42%
Return on Assets
EPI A
SAND
CAT

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