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SKF AB (SE:SKF.B)
:SKF.B

SKF AB (SKF.B) AI Stock Analysis

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SE

SKF AB

(LSE:SKF.B)

Rating:77Outperform
Price Target:
kr239.00
▲(12.31%Upside)
SKF AB demonstrates robust financial performance with strong profitability and a solid balance sheet. Despite concerns over recent revenue contraction and declining free cash flow growth, the company's technical indicators show positive momentum, though caution is advised due to potential overbought conditions. The stock's valuation is attractive with a reasonable P/E ratio and appealing dividend yield. These factors collectively contribute to a solid overall stock score.

SKF AB (SKF.B) vs. iShares MSCI Sweden ETF (EWD)

SKF AB Business Overview & Revenue Model

Company DescriptionAB SKF (publ) engages in the design, development, and manufacture of bearings, seals, lubrication systems, and services worldwide. It operates in two segments, Industrial and Automotive. The company offers rolling bearings, mounted bearings and housings, super-precision bearings, slewing bearings, plain bearings, magnetic bearings and systems, industrial and automotive seals, lubrication management solutions, maintenance products, condition monitoring systems, power transmission solutions, test and measuring equipment, vehicle aftermarket, and waste electric and electronic equipment products. It also provides various services, including application engineering, asset management, condition-based maintenance, mechanical maintenance, remanufacturing and customization, and training solutions. The company offers its solutions for various industries, including aerospace, agriculture, cars and light trucks, construction, food and beverage, general machinery, machine tools, marine, material handling, metals, mining, mineral processing and cement, ocean energy, oil and gas, pulp and paper, railways, trucks, trailers, buses, two and three wheelers, and wind energy. AB SKF (publ) was founded in 1907 and is headquartered in Gothenburg, Sweden.
How the Company Makes MoneySKF AB generates revenue primarily through the sale of its extensive range of products, such as bearings and units, seals, mechatronics, and lubrication systems. The company serves a diverse range of industries, including automotive, industrial, and aerospace, ensuring a broad customer base and steady demand. SKF also offers a range of services, including asset management, engineering consultancy, and training, which supplement its product sales. The company's revenue model is bolstered by its global presence, strategic partnerships, and focus on innovation, ensuring it remains competitive in the market.

SKF AB Financial Statement Overview

Summary
SKF AB showcases strong financial stability with consistent profitability and solid cash flow generation. While the company maintains a strong balance sheet with low leverage, recent revenue contraction and a decrease in free cash flow growth present potential areas of concern. Continued focus on revenue growth and cash flow optimization will be crucial for future performance.
Income Statement
75
Positive
SKF AB's income statement shows a stable financial performance with a healthy gross profit margin of 27.7% in 2024, slightly improving from 25.5% in 2020. The net profit margin has remained stable around 6.6% in 2024, consistent with previous years. Revenue growth rate was modest at -4.0% from 2023 to 2024. The EBIT margin is strong at 10.5% in 2024, although slightly lower than in 2021. Overall, the company demonstrates stability and profitability, but recent revenue contraction may be a concern.
Balance Sheet
80
Positive
The balance sheet reflects a strong equity position with a debt-to-equity ratio of 0.34 in 2024, indicating low financial leverage. The equity ratio improved to 50.0% in 2024, showing increased financial stability. Return on equity was 10.9% in 2024, up from 8.6% in 2020, indicating efficient use of equity. SKF AB maintains a solid financial structure with low leverage and good equity returns, although focus on further improving asset utilization could enhance performance.
Cash Flow
70
Positive
The cash flow statement shows a strong operating cash flow to net income ratio of 1.67 in 2024, indicating robust cash generation relative to net income. Free cash flow decreased by 36.3% from 2023 to 2024, but remains positive. The free cash flow to net income ratio stands at 0.79 in 2024, reflecting adequate free cash generation. SKF AB's cash flow management is sound, yet the decline in free cash flow growth warrants attention.
Breakdown
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
97.99B98.72B103.88B96.93B81.73B74.85B
Gross Profit
27.41B27.37B26.49B24.47B23.27B16.99B
EBIT
10.95B10.34B11.08B8.53B10.76B7.07B
EBITDA
14.85B14.61B14.34B11.51B13.76B10.08B
Net Income Common Stockholders
6.38B6.47B6.39B4.47B7.33B4.30B
Balance SheetCash, Cash Equivalents and Short-Term Investments
11.14B11.03B13.65B11.22B13.66B14.64B
Total Assets
113.19B119.41B111.90B110.92B99.63B90.56B
Total Debt
0.0020.04B21.69B21.27B19.21B17.82B
Net Debt
0.009.01B8.38B11.01B5.99B3.77B
Total Liabilities
54.03B57.44B56.95B56.88B54.26B54.84B
Stockholders Equity
56.90B59.65B52.74B51.93B43.65B34.31B
Cash FlowFree Cash Flow
4.39B5.70B8.02B428.00M1.36B4.89B
Operating Cash Flow
9.99B10.79B13.78B5.64B5.25B8.27B
Investing Cash Flow
-5.22B-5.60B-5.87B-5.35B-3.15B-3.01B
Financing Cash Flow
-7.55B-7.57B-4.51B-3.40B-3.51B2.69B

SKF AB Technical Analysis

Technical Analysis Sentiment
Positive
Last Price212.80
Price Trends
50DMA
194.72
Positive
100DMA
206.11
Positive
200DMA
200.67
Positive
Market Momentum
MACD
4.35
Positive
RSI
60.81
Neutral
STOCH
75.23
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SE:SKF.B, the sentiment is Positive. The current price of 212.8 is above the 20-day moving average (MA) of 209.47, above the 50-day MA of 194.72, and above the 200-day MA of 200.67, indicating a bullish trend. The MACD of 4.35 indicates Positive momentum. The RSI at 60.81 is Neutral, neither overbought nor oversold. The STOCH value of 75.23 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SE:SKF.B.

SKF AB Peers Comparison

Overall Rating
UnderperformOutperform
Sector (66)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
77
Outperform
kr97.43B15.2611.14%3.62%-3.96%2.77%
66
Neutral
$4.51B12.295.40%3.67%4.15%-12.21%
kr172.40B22.3018.80%2.05%
kr741.37B23.2227.15%2.08%
kr37.07B20.4228.32%1.97%
kr269.94B18.2515.81%2.68%
kr82.32B22.519.02%2.12%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
SE:SKF.B
SKF AB
212.80
7.66
3.73%
GB:0NNF
Alfa Laval AB
411.40
-59.59
-12.65%
GB:0XXV
Atlas Copco AB
139.70
-32.68
-18.96%
GB:0MQG
Mycronic AB
189.46
-24.97
-11.64%
GB:0HC0
Sandvik AB
211.38
-4.67
-2.16%
GB:0NL3
Trelleborg AB
356.52
-48.33
-11.94%
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.