Boliden and Sandvik, two prominent Swedish industrial companies, have recently been downgraded by UBS analysts due to company-specific challenges and broader sector headwinds.
Boliden, a key player in the mining sector, has experienced a decline in its stock price following a downgrade from "neutral" to "sell" by UBS analysts. The analysts have expressed concerns about Boliden's future performance, particularly as it faces challenges such as declining metal grades at critical mining sites and uncertainties at the Kevitsa site.
Furthermore, UBS analysts have highlighted potential issues with treatment and refining charges in Boliden's smelting operations, as well as the risk of capital expenditure overruns. As a result of these concerns, UBS has reduced Boliden's target price.
Sandvik, another prominent Swedish industrial company, has also been downgraded by UBS analysts from "neutral" to "sell." The downgrade is primarily due to challenges in Sandvik's short-cycle business, particularly within the metal cutting division.
UBS analysts have pointed to weak demand indicators and increasing competition from Chinese manufacturers as key factors contributing to Sandvik's downgrade. Additionally, Sandvik's ties to the automotive industry, which is transitioning to electric vehicles, further add to its vulnerability.
UBS has revised its earnings estimates for Sandvik, projecting a decrease in diluted earnings per share for 2024 and 2025.
These downgrades reflect a broader trend of caution among analysts in the industrial sector.