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Epiroc AB (SE:EPI.A)
:EPI.A
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Epiroc AB
(EPI.A)
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Rating:71Outperform
Price Target:
kr278.00
▲(9.06% Upside)
The score is driven primarily by strong underlying financial quality (high margins, solid ROE, and healthy free cash flow) and supportive management commentary on sustained mining demand and continued efficiency actions. This is tempered by premium valuation (high P/E with modest yield) and technically stretched momentum indicators (RSI/Stoch), alongside identifiable margin headwinds (tariffs and tungsten costs).
Positive Factors
High profitability & returns
Sustained high gross and operating margins plus ~20% ROE indicate durable earnings power and operational efficiency. This margin base, supported by a large aftermarket mix, underpins reinvestment, dividend capacity and competitive resilience across mining cycles.
Strong cash generation and de‑leveraging
Material deleveraging and high cash conversion bolster financial flexibility for organic investment, bolt‑on M&A and steady dividends. Robust cash flows reduce refinancing risk and support continued capex for automation and electrification initiatives over the medium term.
Leadership in automation & electrification
Large autonomous and BEV contract wins validate product leadership in structural electrification and automation trends. These programmatic deals deepen customer relationships, create recurring service opportunities and differentiate Epiroc versus peers in long‑term, higher‑value aftermarket.
Negative Factors
Cooling revenue growth
Slowing top‑line reduces operating leverage and constrains margin expansion and reinvestment capacity. With construction/attachments weak and some miners on care & maintenance, sustained revenue cooling could press margins and limit progress toward long‑term service growth targets.
Persistent tariff and commodity margin headwinds
Ongoing tariffs and a sharp tungsten price shock materially compress Tools & Attachment and Equipment & Service margins unless passed on. These structural input and trade‑policy pressures require sustained pricing, sourcing or efficiency actions to protect long‑term profitability.
Working capital and cash flow volatility
Inconsistent cash conversion and working‑capital swings create earnings‑to‑cash volatility, making funding for capex, acquisitions and dividends less predictable. Inventory builds and timing effects increase execution risk and could tighten liquidity if adverse trends persist.
Epiroc AB (EPI.A) vs. iShares MSCI Sweden ETF (EWD)
Market Cap
kr290.48B
Dividend Yield1.84%
Average Volume (3M)1.54M
Price to Earnings (P/E)35.8
Beta (1Y)1.32
Revenue Growth2.00%
EPS Growth-0.25%
CountrySE
Employees19,042
SectorIndustrials
Sector Strength72
IndustryAgricultural - Machinery
Share Statistics
EPS (TTM)1.91
Shares Outstanding823,765,800
10 Day Avg. Volume1,503,394
30 Day Avg. Volume1,535,198
Financial Highlights & Ratios
PEG Ratio-16.43
Price to Book (P/B)6.01
Price to Sales (P/S)4.09
P/FCF Ratio28.23
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
kr245.83Price Target Upside-3.56% Downside
Rating ConsensusModerate Buy
Number of Analyst Covering6
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Epiroc AB Business Overview & Revenue Model
Company DescriptionEpiroc AB (publ), together with its subsidiaries, develops and produces equipment for use in surface and underground applications in Sweden. It operates through Equipment & Service and Tools & Attachments segments. The Equipment & Service segment provides equipment and solutions for rock drilling, mechanical rock excavation, rock reinforcement, loading and haulage, exploration drilling, and ventilation systems, as well as drilling equipment for water and energy; and related spare parts, services, and solutions. This segment also provides solutions for automation, digitalization, and electrification. The Tools & Attachments segment offers rock drilling tools and hydraulic attachments that are used primarily for drilling, deconstruction, recycling, and rock excavation. The company was founded in 1873 and is headquartered in Nacka, Sweden.
How the Company Makes MoneyEpiroc generates revenue primarily through the sale of equipment and tools for the mining and construction sectors. Their revenue model consists of two main streams: equipment sales and aftermarket services. Equipment sales involve the direct sale of machinery, tools, and accessories, while aftermarket services encompass maintenance, spare parts, and upgrades, which are crucial for customer retention and long-term profitability. Significant partnerships with mining and construction companies enhance their market reach and product development. Additionally, Epiroc benefits from trends towards automation and sustainability, positioning them to capture new revenue opportunities in these growing areas.
Epiroc AB Earnings Call Summary
Earnings Call Date:Jan 26, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 29, 2026
Earnings Call Sentiment Positive
The call presents a solid operational and commercial performance with multiple strategic and technological achievements (automation milestones, largest-ever order, electrification wins, strong organic order growth and improved Tools & Attachment profitability). These positives are tempered by meaningful external headwinds — notably currency translation, tariffs and a looming tungsten cost impact — and remaining margin work particularly in Equipment & Service. Balance sheet and cash metrics are strong, and management has clear mitigation and efficiency plans. On balance, the highlights outweigh the lowlights.Q4-2025 Updates
Positive Updates
Organic Order and Revenue Growth (FY2025)
Orders grew organically 7% to SEK 63 billion and revenues grew 2% to SEK 62 billion for the full year 2025 despite currency headwinds.
Strong Q4 Momentum
Q4 orders increased organically 11% (total orders down 1% due to currency) to almost SEK 16 billion; Q4 revenues grew 4% organically. Equipment orders in Q4 rose 22% organically and service orders grew 6% organically.
High Adjusted Operating Margin Maintained
Adjusted operating margin for the year was 19.6% (vs 19.8% prior year) and Q4 adjusted operating margin was 19.6% (vs 19.7% in Q4 2024), showing resilience amid tariffs and FX headwinds.
Record and Landmark Automation Projects
Completed conversion of Roy Hill mixed fleet to driverless operation (78 haul trucks and ~250 ancillary vehicles) and fully automated a production level at Newmont Cadia underground; driverless machines in operation exceeded 3,900, up 13% vs 2024.
Largest Ever Order and Electrification Wins
Secured largest-ever contract: SEK 2.2 billion over 5 years to deliver ~50 fully autonomous electric surface blasthole rigs to Fortescue. Electrification revenues reached 3.8% of group revenues; 40 mines ordered BEVs in 2025.
Productivity Gains from Electrification Pilots
Boliden Rävliden 5-km battery trolley line delivered: productivity +23%, ramp speeds +50%, maintenance costs -25%, diesel consumption -80%, demonstrating material operational benefits.
Tools & Attachment Profit Improvement
Tools & Attachment operating profit rose 65% YoY to SEK 537 million in Q4 (highest ever for the business area); adjusted margin improved to 12.3% from 8.4% a year ago, driven mainly by efficiency measures and footprint consolidation.
Improved Balance Sheet and Cash Generation
Net debt reduced to SEK 11.0 billion from SEK 14.8 billion a year earlier; net debt / EBITDA improved to 0.73 (from 0.93). Cash position SEK 9.6 billion; 12-month cash conversion at 90%.
Safety and Workforce Progress
Total recordable injury frequency rate improved to 3.9 from 4.3 year-over-year. India footprint expanded (1,300+ employees) with double-digit growth and new production / R&D hub initiatives.
Dividend Discipline
Board proposes ordinary dividend SEK 3.80 per share (unchanged), SEK 4.6 billion total, representing 53% of net profit and consistent with dividend policy.
Negative Updates
Currency and Tariff Headwinds
Currency effects materially depressed reported revenue growth (Q4 group revenues down 7% to SEK 16.1 billion with an organic increase of 4% and currency drag of ~11%). Tariffs negatively impacted operating margin by ~0.5 percentage points in Q4 and are expected to remain a headwind into 2026 (though easing each quarter).
Margin Pressure in Equipment & Service
Adjusted EBIT margin for Equipment & Service fell to 22.1% from 23.6% year-over-year, reflecting tariff, currency and some inefficiencies; management indicates more efficiency actions are required in E&S.
Tungsten (Carbide) Price Shock and 2026 Headwind
Tungsten prices more than doubled in 2025; company expects a Tools & Attachment margin headwind in 2026 of 'a few tens of percentage points' (timing and magnitude depend on pricing actions and recycling/sourcing mitigation).
Nickel Market Weakness Impacting Aftermarket
Softer nickel prices left many nickel-mine customers on care & maintenance throughout 2025, weighing on aftermarket/service demand (impact persisted into Q4; recovery depends on commodity price stabilization).
Subdued Attachments / Construction Demand
Attachments demand for construction remained weak and seasonal (Q4 typically weaker for attachments); overall infrastructure/construction exposure (21% of orders) is more mixed and attachments destocking only ended late in the year.
Working Capital and Inventory Build (FX-adjusted)
Net working capital fell 9% to SEK 22.0 billion on a reported basis, but excluding currency effects inventories increased somewhat (partly offset by higher payables). Working capital/revenues improved slightly to 36.9% from 37.4%.
Return on Capital and Profit Level Slightly Down
Return on capital employed declined to 18.9% from 20.6% (rolling 12 months), attributed to higher intangible assets and somewhat lower profit; operating cash flow in the quarter (SEK 2.6bn) was solid but below prior-year record quarterly level (SEK 4.0bn).
Company Guidance
Epiroc’s forward guidance stressed that mining demand is expected to remain high into 2026 while construction should recover somewhat from a low base, tariffs will continue to pressure margins but at somewhat lower levels each quarter (Q4 tariff hit was just below 0.5 ppt), and the effective tax rate is guided at 22–24%; management will keep investing in organic growth, pursue bolt‑on M&A, and maintain regular dividends (Board proposal SEK 3.80/share = SEK 4.6bn = 53% of net profit). Key targets and context include returning service growth toward its long‑term ~8% p.a. (service was 6% in orders and c.4% organic service revenue in Q4; service represents 41% of revenues and aftermarket 63%), capturing more customer share from an average fleet age of 8.6 years, and absorbing cost pressures such as tungsten (prices more than doubled in 2025; T&A faces an anticipated margin headwind of “a few tens of percentage points” in 2026). Capital priorities are clear: organic investment first, bolt‑ons close to the core, and shareholder distributions, supported by a strong balance sheet (net debt down to SEK 11bn from 14.8bn, net debt/EBITDA 0.73, cash SEK 9.6bn), solid cash generation (Q4 operating cash flow SEK 2.6bn, 12‑month cash conversion 90%) and ongoing efficiency programs that should lift margins (Tools & Attachment adjusted margin 12.3% in Q4; Equipment & Service adjusted margin 22.1%).Epiroc AB Financial Statement Overview
Summary
Strong profitability remains a key strength (2025 gross margin ~37%, operating margin ~19%) with solid returns (ROE ~20%) and meaningful free cash flow (~9.0B). The score is held back by cooling growth (2025 revenue decline), some margin compression versus 2022–2023, slightly higher leverage (debt-to-equity ~0.50), and more volatile cash flow coverage trends.Income Statement
Epiroc shows strong profitability with consistently healthy gross and operating margins (2025 gross margin ~37% and operating margin ~19%), supporting solid earnings power. However, growth has clearly cooled: revenue slipped in 2025 after modest growth in 2024, and profitability has trended down from the 2022–2023 peak (net margin ~13.9% in 2025 vs. ~15.6% in 2023). Overall, margins remain strong for the industry, but the recent deceleration and margin compression weigh on the score.78
Positive
Balance Sheet
The balance sheet looks generally sound with moderate leverage (debt-to-equity ~0.50 in 2025) and a still-strong return on equity (~20% in 2025). That said, leverage has moved higher versus 2021–2023 levels (roughly mid-0.3s to ~0.38), and returns have come off prior highs (mid-20% range in 2021–2023). In short: solid capital structure and returns, but trending slightly less favorable.74
Positive
Cash Flow
Cash generation is healthy in absolute terms (2025 operating cash flow ~11.0B and free cash flow ~9.0B), and free cash flow remains a strong portion of earnings (about ~82% of net income in 2025). The main weakness is consistency and trajectory: free cash flow declined in 2025 and operating cash flow has not consistently covered accounting earnings strongly across the period (coverage below ~0.6 in recent years), suggesting working-capital or timing swings that can add volatility.70
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 62.00B | 63.60B | 60.34B | 49.69B | 39.65B |
| Gross Profit | 22.97B | 22.95B | 23.15B | 19.02B | 15.45B |
| EBITDA | 15.01B | 15.47B | 15.69B | 13.25B | 10.85B |
| Net Income | 8.60B | 8.73B | 9.43B | 8.40B | 7.06B |
Balance Sheet | |||||
| Total Assets | 80.38B | 83.59B | 67.78B | 61.78B | 48.58B |
| Cash, Cash Equivalents and Short-Term Investments | 10.94B | 7.18B | 6.40B | 7.33B | 10.79B |
| Total Debt | 21.02B | 21.57B | 13.57B | 10.74B | 9.18B |
| Total Liabilities | 38.10B | 40.41B | 30.57B | 28.27B | 22.80B |
| Stockholders Equity | 42.26B | 42.76B | 36.82B | 33.02B | 25.73B |
Cash Flow | |||||
| Free Cash Flow | 8.99B | 8.60B | 5.46B | 4.54B | 6.68B |
| Operating Cash Flow | 11.03B | 10.46B | 7.14B | 5.56B | 7.61B |
| Investing Cash Flow | -2.95B | -11.69B | -5.24B | -5.99B | -3.47B |
| Financing Cash Flow | -5.26B | 1.90B | -2.64B | -3.23B | -8.44B |
Epiroc AB Technical Analysis
Positive
254.90
Price Trends
213.22
Positive
208.91
Positive
206.50
Positive
Market Momentum
10.10
Negative
78.37
Negative
91.55
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SE:EPI.A, the sentiment is Positive. The current price of 254.9 is above the 20-day moving average (MA) of 228.27, above the 50-day MA of 213.22, and above the 200-day MA of 206.50, indicating a bullish trend. The MACD of 10.10 indicates Negative momentum. The RSI at 78.37 is Negative, neither overbought nor oversold. The STOCH value of 91.55 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SE:EPI.A.
Epiroc AB Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | kr857.65B | 29.47 | 26.43% | 2.03% | -2.38% | -4.00% | |
76 Outperform | kr857.65B | 33.82 | 26.43% | 1.82% | -2.38% | -4.00% | |
75 Outperform | kr658.84B | 19.06 | 20.27% | 6.34% | -7.96% | -31.18% | |
71 Outperform | kr290.48B | 35.83 | ― | 1.84% | 2.00% | -0.25% | |
70 Neutral | kr658.84B | 19.06 | 20.27% | 2.74% | -7.96% | -31.18% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
45 Neutral | kr770.22M | -3.76 | ― | ― | 7.93% | -9.04% |
* Industrials Sector Average
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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.