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Sandvik AB (SDVKY)
OTHER OTC:SDVKY
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Sandvik AB
(OTC:SDVKY)
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Rating:68Neutral
Price Target:
$48.00
â–²(33.41% Upside)
Action:ReiteratedDate:01/29/26
The score is driven primarily by solid fundamentals—strong profitability and reliable free cash flow—with supportive but riskier technicals due to extreme overbought readings. A high P/E and near-term FX/tungsten uncertainty from the earnings call temper the overall outlook.
Positive Factors
Strong cash generation
Consistent, substantial free cash flow and very high cash conversion provide durable financial flexibility. This strengthens the company's ability to fund CapEx, R&D, M&A, and debt reduction through cycles, supporting long‑term investment and capital allocation even if revenue softens.
Robust margins and profitability
Sustained mid-to-high teens EBITA margins and stable gross margins (~37–41%) indicate durable operational efficiency and pricing power across segments. Strong margins provide cushioning versus demand volatility, allow reinvestment in technology, and support healthy returns on capital over the medium term.
Market breadth & innovation momentum
Broad geographic exposure, diversified segments, and clear progress in digital, automation and product launches create structural competitive advantages. Double-digit digital order growth suggests rising higher‑value services and recurring revenue potential, improving long‑term resilience.
Negative Factors
Material currency headwinds
Large, persistent FX impacts materially depress reported revenue and margins and obscure organic momentum. Continued currency volatility can reduce near-term EBITDA and cash flow, complicate planning and make year-on-year comparability and guidance less reliable over the coming quarters.
Recent top-line softness
A multi-year slowdown in revenue growth reduces the benefit of operating leverage and may pressure margins and returns if prolonged. Weakening top-line trends constrain reinvestment, slow deleveraging, and raise the risk that fixed-cost base limits near-term margin expansion.
Tungsten price & supply volatility
Volatile tungsten costs and potential supply policy shifts create structural input-cost risk for cutting tools. Sustained raw-material swings can erode tooling margins, complicate pricing, and impair aftermarket profitability, reducing predictability of margins and cash flow over months.
Sandvik AB (SDVKY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$53.69B
Dividend Yield1.86%
Average Volume (3M)1.29K
Price to Earnings (P/E)37.1
Beta (1Y)1.05
Revenue Growth2.17%
EPS Growth25.95%
CountryUS
Employees41,400
SectorIndustrials
Sector Strength72
IndustryIndustrial - Machinery
Share Statistics
EPS (TTM)0.38
Shares Outstanding1,254,386,000
10 Day Avg. Volume0
30 Day Avg. Volume1,287
Financial Highlights & Ratios
PEG Ratio1.36
Price to Book (P/B)4.03
Price to Sales (P/S)3.31
P/FCF Ratio24.82
Enterprise Value/Market Cap9.83
Enterprise Value/Revenue4.39
Enterprise Value/Gross Profit11.46
Enterprise Value/Ebitda19.15
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)1.58
Revenue Forecast (FY)$14.52B
Sandvik AB Business Overview & Revenue Model
Company DescriptionSandvik AB (publ) operates as an engineering company in the areas of mining and rock excavation, rock processing, manufacturing and machining, and materials technology in Sweden and internationally. The company offers mining and rock solutions, including drill rigs, underground loaders and trucks, rock drills and other tools, and parts and services, as well as digital and sustainability solutions; and rock processing applications, which include crushing, screening, feeding, breaking, demolition, and recycling. It also provides manufacturing solutions, comprising traditional metal cutting under the Sandvik Coromant, Walter, Wolfram, Seco, and Dormer Pramet brands; and manufactures tools and tooling systems for advanced metal cutting. In addition, the company develops and manufactures advanced stainless steels, powder-based alloys, and special alloys. It serves aerospace, automotive, construction, mining, general engineering, nuclear power generation, oil and gas, process, and renewable energy industries. The company was founded in 1862 and is headquartered in Stockholm, Sweden.
How the Company Makes MoneySandvik AB generates revenue through multiple key segments: Mining and Rock Solutions, which supplies equipment and services for the mining industry; Metal Cutting Solutions, offering tools and technology for metalworking; and Materials Technology, focusing on advanced materials and manufacturing solutions. The company earns money primarily through the sale of equipment, tools, and aftermarket services, including maintenance and repairs. Significant partnerships with major industrial players and a strong focus on R&D enable Sandvik to maintain a competitive edge, driving consistent revenue growth. Additionally, the company benefits from a global presence, allowing it to tap into diverse markets and mitigate risks associated with economic fluctuations in specific regions.
Sandvik AB Earnings Call Summary
Earnings Call Date:Jan 27, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 22, 2026
Earnings Call Sentiment Positive
Operational performance was strong: double-digit organic order and revenue growth, resilient margins, high cash conversion and meaningful strategic progress in digital and product innovation. These achievements were materially offset by significant and unexpected currency headwinds, commodity (tungsten) price volatility and some segment/regional softness (Rock Processing comps, automotive). On balance, underlying business momentum and cash/earnings strength outweigh the external FX and commodity challenges, but near-term visibility is affected by currency and tungsten uncertainty.Q4-2025 Updates
Positive Updates
Strong Organic Order and Revenue Growth
Organic order intake +15% and organic revenue +12% in Q4; total order intake +4% and total revenue +1% after currency effects.
Robust Profitability and Margins
Adjusted EBITA ~SEK 6.4bn in the quarter with an adjusted EBITA margin of 19.6% (rolling 12-month margin 19.3%, up from 19.2%). Adjusted profit for the period SEK 4.2bn (up from SEK 4.1bn).
Very Strong Cash Generation
Free operating cash flow SEK 6.7bn in the quarter; cash conversion 110% in Q4 and 95% for the full year.
Mining Outperformance
Mining total order intake +5%, organic +17%; equipment growth +39% (ex-major-orders organic +12%). Mining adjusted EBITA SEK 3.8bn with margin 21.5% and operating leverage of 32%.
Geographic Breadth of Growth
Solid growth across regions: Europe +13%, North America +9%, Asia +14%, Australia +43%, South America +13%, Africa & Middle East +5%; China cutting tools grew double digits.
Strategic and Digital Momentum
Digital Mining Technologies and Intelligent Manufacturing achieved double-digit order growth; two large automation orders in Mining; Metrologic launched Copilot AI integration and a New Machining Module; Rock Processing launched a new automated Jaw Crusher platform (internal innovation award).
Operational Leverage & Cost Savings
Group revenue-driven EBITA leverage ~31%; restructuring savings contributed SEK 131m in the quarter and segment savings boosted margins (Machining & Intelligent Manufacturing savings ~SEK 103m). Acquisitions were slightly accretive (20 bps).
Balance Sheet and Capital Allocation Progress
Net financial debt reduced to SEK 27bn; net debt (including leases/pensions) SEK 34bn; net debt/EBITDA ~0.9. Active M&A pipeline and guidance CapEx FY 2026 at SEK 4.0–4.5bn.
Negative Updates
Significant Currency Headwind
Currency hit almost SEK 1.2bn in the quarter (dilution ~130bps to margin); currency was -12% on orders and -11% on revenues, and Q1 2026 expected currency impact ~-SEK 1.4bn based on rates as of 23 Jan.
Total Growth Masked by FX
Strong organic growth (orders +15%, revenues +12%) was largely offset by negative currency, leaving total order growth only +4% and total revenue growth +1%.
Rock Processing Order Weakness vs Tough Comps
Rock Processing total order intake -9% year-on-year (organic ~0%, excluding major orders organic +2%); adjusted EBITA just below SEK 400m, margin 14.5% (slightly down) with currency impact almost SEK 100m (~170bps dilution).
Mixed Demand in Cutting Tools and Automotive Weakness
Cutting tools demand mixed by segment: strong in aerospace/defense but automotive weak (automotive up low single digits overall; China automotive down high single digits). Cutting tools growth aided by low comps and surcharges.
Tungsten Price Volatility and Supply Risk
Sharp tungsten price increases prompted pre-buying in China and create uncertainty for tooling margins and pricing; tungsten historically volatile and potential supply changes (e.g., China policy or new supply) could reverse dynamics.
Q1 Seasonality and Near-Term Headwinds
Q1 is typically a low invoicing quarter due to seasonality; combined with continued currency headwinds (expected -SEK 1.4bn), near-term top-line and EBITDA pressure indicated.
Guidance and Comparables Uncertainty
Some guidance items impacted by currency (actual FX worse than prior guidance SEK 1.2bn vs guided SEK 1.0bn); tungsten/tariff effects will start to appear in comps from Q2, adding uncertainty to year-on-year comparisons.
Segment-Specific Challenges and Tough Comparisons
Rock Processing mining orders faced tough year-ago comparables; aerospace in China down (timing of orders) and some regional softness means recovery not yet broad-based in Europe/infrastructure despite early positive signs.
Company Guidance
Guidance highlights: management expects the significant currency headwind to continue into Q1 2026, with an unexpected negative FX impact of about SEK 1.4 billion on top‑line and EBITDA (based on FX rates as of 23 Jan), after Q4 FX headwinds of ~SEK 1.2 billion (≈130 bps margin dilution); Q1 is also seasonally a low‑invoicing quarter. For the full year they guide CapEx SEK 4.0–4.5 billion, an interest net trending down to about SEK 0.6 billion, and an unchanged normalized tax rate of ~24.4%; net financial debt was SEK 27 billion at year‑end (net debt incl. leases & pensions ~SEK 34 billion, net debt/EBITDA ~0.9). Operationally they reiterated a Mining margin corridor of 20–22% with normal operating leverage ~30%, a long‑run machining drop‑through target near 40%, and continued focus on working capital and cash generation after Q4 free operating cash flow of SEK 6.7 billion (cash conversion 110%, FY cash conversion 95%).Sandvik AB Financial Statement Overview
Summary
Strong profitability and dependable free cash flow support the score (healthy margins, consistent positive FCF). The main drag is recent top-line softness with revenue declines in 2024 and 2025 and some variability in operating cash conversion, though leverage appears manageable and improved versus 2022.Income Statement
Profitability is solid for an industrial machinery business, with gross margin consistently ~37%–41% and 2025 net margin improving to ~12.2% (from ~10.0% in 2024). However, growth has cooled meaningfully: revenue declined in 2024 (slightly) and fell more in 2025 (down ~5.4%), and operating profitability (EBIT) in 2025 was below the 2023 peak. Overall: strong margins and earnings power, but a weaker recent demand/revenue trajectory.74
Positive
Balance Sheet
Leverage looks manageable with debt-to-equity around ~0.44 in 2024–2025 (down from higher leverage in 2022), suggesting improved balance-sheet flexibility. Returns on equity are healthy (about ~14.8% in 2025, ~12.6% in 2024, ~17.5% in 2023), but not consistently trending upward. Total debt remains sizable in absolute terms, so the main risk is reduced resilience if the revenue slowdown persists.70
Positive
Cash Flow
Cash generation is a clear strength: free cash flow is consistently positive and substantial across the period, and free cash flow runs at a healthy ~0.77–0.81 of net income in 2024–2025, indicating decent earnings quality. That said, free cash flow growth slipped in 2025 (down ~3.3%), and cash conversion from operations is not perfect (operating cash flow is roughly ~0.50 of EBIT in 2024–2025), implying some working-capital or operational variability. Overall: strong, dependable free cash flow with mild recent deceleration.77
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 113.44B | 122.88B | 126.50B | 112.33B | 99.11B |
| Gross Profit | 46.06B | 49.14B | 52.05B | 45.37B | 40.17B |
| EBITDA | 27.13B | 26.99B | 30.68B | 25.80B | 23.65B |
| Net Income | 13.81B | 12.24B | 15.30B | 11.21B | 14.46B |
Balance Sheet | |||||
| Total Assets | 169.86B | 184.38B | 174.21B | 176.68B | 155.52B |
| Cash, Cash Equivalents and Short-Term Investments | 4.96B | 4.53B | 4.36B | 10.49B | 13.59B |
| Total Debt | 40.69B | 42.76B | 45.08B | 52.06B | 34.35B |
| Total Liabilities | 76.62B | 87.39B | 86.51B | 95.41B | 78.19B |
| Stockholders Equity | 93.17B | 96.92B | 87.63B | 81.23B | 77.20B |
Cash Flow | |||||
| Free Cash Flow | 15.12B | 15.77B | 13.44B | 5.93B | 9.60B |
| Operating Cash Flow | 18.72B | 20.61B | 18.80B | 10.46B | 13.18B |
| Investing Cash Flow | -6.66B | -7.67B | -8.51B | -20.30B | -26.19B |
| Financing Cash Flow | -11.19B | -12.99B | -16.21B | 6.22B | 2.49B |
Sandvik AB Technical Analysis
Positive
35.98
Price Trends
37.69
Positive
33.86
Positive
29.16
Positive
Market Momentum
1.63
Positive
60.82
Neutral
80.29
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SDVKY, the sentiment is Positive. The current price of 35.98 is below the 20-day moving average (MA) of 42.26, below the 50-day MA of 37.69, and above the 200-day MA of 29.16, indicating a bullish trend. The MACD of 1.63 indicates Positive momentum. The RSI at 60.82 is Neutral, neither overbought nor oversold. The STOCH value of 80.29 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SDVKY.
Sandvik AB Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $127.66B | 36.81 | 25.79% | 0.79% | 0.22% | 26.66% | |
79 Outperform | $146.39B | 35.98 | 21.57% | 1.29% | 8.24% | 6.21% | |
72 Outperform | $83.92B | 27.71 | 93.75% | 2.43% | -0.41% | -10.88% | |
69 Neutral | $85.51B | 36.82 | 11.31% | 1.58% | 2.97% | 18.14% | |
68 Neutral | $53.69B | 37.07 | 15.72% | 1.86% | 2.17% | 25.95% | |
68 Neutral | $46.31B | 46.62 | 27.71% | 1.33% | 0.98% | -7.51% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% |
* Industrials Sector Average
SDVKY
Sandvik AB
42.77
20.70
93.76%
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EMR
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PH
Parker Hannifin
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ROK
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50.19%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.