Sandvik has been downgraded by UBS from a Neutral rating to a Sell rating due to an unaccounted structural decline in the Advanced Metal Cutting (SMM) segment, which represents 40% of the company's sales.
The new price target for Sandvik is SEK 200, down from SEK 230. UBS's downgrade is based on Sandvik's Q3 results, which indicate declining volumes in the SMM business and weaker margins.
UBS has also adjusted its earnings before interest, taxes, and amortization (EBITA) estimates for 2024 and 2025, reducing them by 3.2% and 8.8% respectively.