Sandvik has been downgraded by UBS from a Neutral rating to a Sell rating due to concerns about a potential decline in the Advanced Metal Cutting (SMM) segment, which accounts for 40% of the company's sales.
The new price target for Sandvik is SEK 200, down from SEK 230. The downgrade comes after Sandvik's Q3 results showed a decrease in volumes in the SMM business, resulting in weaker margins. UBS believes that these factors were not reflected in the stock's pricing.
Consequently, UBS is revising its adjusted EBITA estimates for Sandvik, with projected figures for 2024 and 2025 being lowered by 3.2% and 8.8% respectively.