SKF AB (SKF.B) AI Stock Analysis

• Market Cap: kr110.65B
• Dividend Yield: 3.19%
• Average Volume (3M): 1.19M
• Price to Earnings (P/E): 28.5
• Beta (1Y): 1.41
• Revenue Growth: -4.16%
• EPS Growth: -12.95%
• Country: SE
• Employees: 38,426
• Sector: Industrials
• Sector Strength: 72
• Industry: Manufacturing - Tools & Accessories
• EPS (TTM): 3.50
• Shares Outstanding: 426,420,260
• 10 Day Avg. Volume: 1,011,093
• 30 Day Avg. Volume: 1,185,701
• PEG Ratio: -0.72
• Price to Book (P/B): 2.09
• Price to Sales (P/S): 1.22
• P/FCF Ratio: 24.56
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: kr252.10
• Price Target Upside: 3.92% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 10
• EPS Forecast (FY): 16.72
• Revenue Forecast (FY): kr90.35B

• Rating: 60 Neutral
• Price Target: kr273.00 ▲(12.53% Upside)
• Action: Reiterated Date: 02/01/26
• Date: Action: Reiterated 02/01/26

The score is primarily supported by a reasonably strong balance sheet and continued positive free cash flow, but is held back by deteriorating revenue/margin trends. Technical signals are weak with the stock trading below major moving averages, and valuation appears demanding given the recent earnings compression despite an attractive dividend yield.

Positive Factors

Improved leverage & resilient balance sheet

SKF’s materially lower debt-to-equity and sizeable equity base provide durable balance-sheet resilience across cycles. Improved leverage reduces interest burden and increases strategic optionality for capex, buybacks or M&A, supporting long-term financial flexibility despite earnings pressure.

Consistent positive free cash flow

Sustained positive free cash flow, including YoY growth in 2025, underpins the company’s ability to fund dividends, invest in product development and repay debt. While conversion is moderate, consistent FCF through cycles is a durable indicator of underlying cash-generative operations and capital allocation capacity.

Diversified end-markets & long-term partnerships

Broad exposure across industrial, automotive and aerospace markets and OEM partnerships create structural demand for essential components and recurring service contracts. This diversification and contractual stickiness mitigate single-market downturns and support steady revenue streams over the medium term.

Negative Factors

Sustained revenue decline

Two consecutive years of negative top-line growth indicate weakened end-market demand or pricing pressures. Persistent revenue contraction erodes operating leverage and limits the company’s ability to rebuild margins or fund growth initiatives, increasing the risk of prolonged earnings underperformance.

Margin compression and lower profitability

Notable deterioration in gross and net margins reduces earnings power and return on capital. Lower profitability limits reinvestment capacity and dividend safety if adverse trends persist, and it makes the business more vulnerable to input-cost or demand shocks over the medium term.

Moderate cash conversion and volatility

Sub‑par cash conversion and historical FCF volatility point to working-capital sensitivity and execution risk. In downturns this can compress liquidity and constrain capital allocation, undermining the benefits of a strong balance sheet and making planning for investments or dividends less predictable.

SKF AB Business Overview & Revenue Model

Company Description

AB 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 Money

SKF AB generates revenue primarily through the sale of its products, including bearings and seals, which are essential components in machinery across various industries. The company operates through several key segments: Industrial, Automotive, and Aerospace, each contributing to its overall revenue. SKF's revenue model is supported by a combination of direct sales, distribution partnerships, and service contracts. Additionally, the company has established significant partnerships with major industrial players and automakers, which help secure long-term contracts and bolster its market presence. Revenue is further augmented by SKF's focus on innovation and sustainability, enabling it to offer advanced solutions that meet evolving customer needs, thus ensuring a steady stream of earnings.

SKF AB Financial Statement Overview

Summary

Overall fundamentals are solid but weakening: revenue turned negative in 2024–2025 and margins have compressed (2025 net margin ~4.3% vs ~6.6% in 2024). Balance sheet quality is a relative strength with improved leverage (debt-to-equity ~0.29 in 2025), while cash flow remains positive but with only moderate conversion (FCF ~54% of net income) and some volatility.

Income Statement

Revenue has softened recently, with growth turning negative in 2024 and 2025, signaling a tougher demand/pricing environment. Profitability remains positive but has clearly compressed versus prior years: 2025 gross margin (~26.8%) and net margin (~4.3%) are down from 2024 (~27.7% and ~6.6%) and well below the stronger 2021 level (~9.0% net margin). The business still generates solid operating profit (2025 operating margin ~8.5%), but the trend over the last two years points to weaker earnings power and less cushion if end-markets deteriorate further.

Balance Sheet

Leverage looks reasonable and has improved, with debt-to-equity declining to ~0.29 in 2025 from ~0.41–0.44 in 2022–2023, which supports balance-sheet resilience. Equity remains sizeable relative to the asset base, providing a buffer through cycles. The main weakness is returns: return on equity eased to ~7.3% in 2025 from ~10.9% in 2024 and ~12.1% in 2023, reflecting the recent profitability compression rather than balance-sheet strain.

Cash Flow

Cash generation is generally healthy with positive free cash flow each year, and 2025 free cash flow grew ~9.3% year-over-year. That said, cash conversion is not particularly strong: free cash flow is only ~54% of net income in 2025 (similar in 2024), and operating cash flow relative to revenue is moderate (~0.33 in 2025). The history also shows volatility (notably weak 2022 free cash flow), which raises some execution/working-capital sensitivity in a downcycle.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	91.58B	98.72B	103.88B	96.93B	81.73B
Gross Profit	24.52B	27.37B	26.49B	24.47B	23.27B
EBITDA	12.38B	14.61B	14.34B	11.51B	13.76B
Net Income	3.93B	6.47B	6.39B	4.47B	7.33B
Balance Sheet
Total Assets	106.42B	119.41B	111.90B	110.92B	99.63B
Cash, Cash Equivalents and Short-Term Investments	9.47B	11.09B	13.65B	11.22B	13.66B
Total Debt	15.34B	20.04B	21.69B	21.27B	19.21B
Total Liabilities	50.75B	57.44B	56.95B	56.88B	54.26B
Stockholders Equity	53.56B	59.65B	52.74B	51.93B	43.65B
Cash Flow
Free Cash Flow	4.56B	5.70B	8.02B	428.00M	1.36B
Operating Cash Flow	8.39B	10.79B	13.78B	5.64B	5.25B
Investing Cash Flow	-1.50B	-5.60B	-5.87B	-5.35B	-3.15B
Financing Cash Flow	-8.29B	-7.57B	-4.51B	-3.40B	-3.51B

SKF AB Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 242.60
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SE:SKF.B, the sentiment is Negative. The current price of 242.6 is below the 20-day moving average (MA) of 254.14, below the 50-day MA of 249.30, and above the 200-day MA of 236.43, indicating a neutral trend. The MACD of 1.42 indicates Positive momentum. The RSI at 39.56 is Neutral, neither overbought nor oversold. The STOCH value of 27.11 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SE:SKF.B.

SKF AB Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ALFA	73 Outperform	kr214.52B	23.27	20.42%	1.84%	3.54%	20.94%
SAND	70 Outperform	kr475.04B	25.67	16.39%	1.94%	-1.77%	21.13%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
TREL.B	61 Neutral	kr84.58B	24.91	9.56%	1.95%	2.73%	7.56%
SKF.B	60 Neutral	kr110.65B	28.50	8.90%	3.19%	-4.16%	-12.95%
HUSQ.B	54 Neutral	kr23.56B	15.04	5.76%	2.20%	-1.74%	-0.59%
NIBE.B	45 Neutral	kr71.91B	31.54	9.65%	0.86%	-0.69%	269.86%