Industrial Automation And Smart Manufacturing Will Expand Global Reach

Key Takeaways

• Expansion into automation, sustainability, and new markets boosts Beijer Alma's growth, pricing power, and diversification across high-value sectors.
  
• Operational streamlining and flexible manufacturing enhance productivity, cost efficiency, and supply chain resilience, driving margin and earnings improvements.
  
• Dependence on cyclical, undiversified markets and acquisition struggles threaten long-term growth, profitability, and resilience amid shifting industry trends and weak organic momentum.

Catalysts

Engages in component manufacturing and industrial trading businesses in Sweden, rest of Nordic Region, rest of Europe, North America, Asia, and internationally.

• The ongoing global acceleration in industrial automation and smart manufacturing is increasing demand for precision and engineered components; Beijer Alma's continued expansion (e.g., investments in higher-capacity production lines to meet excess demand and diversification into high-value sectors like rail) positions the company to capture elevated order volumes and drive future revenue growth.
  
• The global trend toward sustainability and lightweight, energy-efficient components is expected to enhance Beijer Alma's new customer acquisition and pricing power, as evidenced by the company's strong order inflows and factory expansions in segments such as bus windows and rail springs, supporting margin expansion and topline growth.
  
• Strategic investments and acquisitions-such as recent moves into the Indian market and the successful integration of Swemas-expand Beijer Alma's geographic footprint and product portfolio, enabling scale benefits, improved cost efficiencies, and long-term earnings accretion.
  
• The company's decentralization initiatives and cost reduction programs (including factory closures, workforce optimization, and consolidation of production sites) are expected to yield significant productivity improvements and operational margin expansion over the medium term.
  
• Onshoring and regionalization trends in European manufacturing-along with rising customer requirements for high-mix, low-volume, and rapid prototyping-favor flexible, mid-sized companies like Beijer Alma, supporting premium pricing, increased resilience in supply chains, and improved net margins.

Beijer Alma Future Earnings and Revenue Growth

Assumptions

• Analysts are assuming Beijer Alma's revenue will grow by 5.1% annually over the next 3 years.
• Analysts assume that profit margins will increase from 8.9% today to 11.9% in 3 years time.
• Analysts expect earnings to reach SEK 1.0 billion (and earnings per share of SEK 14.54) by about July 2028, up from SEK 664.0 million today.
• In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 19.8x on those 2028 earnings, down from 24.1x today. This future PE is lower than the current PE for the GB Machinery industry at 23.6x.
• Analysts expect the number of shares outstanding to remain consistent over the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 6.53%, as per the Simply Wall St company report.

Beijer Alma Future Earnings Per Share Growth

Risks

• Heavy exposure to cyclical and mature end-markets-particularly in the Nordic region and the US, which are currently experiencing weaker demand-creates earnings volatility and could constrain long-term revenue growth if economic conditions or industrial demand stagnate in these geographies.
  
• Ongoing struggles with the Alcomex acquisition, including factory closures, staff layoffs, and inventory write-downs, reflect integration difficulties; such restructuring expenditures and underperforming assets risk pressuring group net margins and EPS for an extended period.
  
• Slower organic growth in core areas (e.g., only 3% organic revenue growth group-wide, and a neutral outlook for Chassis Springs) indicates limited upside from existing products, potentially making the company more reliant on successful acquisitions; any failure or delay in integrating these acquisitions could undermine revenue expansion and profitability targets.
  
• High operational concentration in Europe and the Nordics exposes Beijer Alma to structurally slower market growth compared to global peers, and lack of meaningful international diversification may limit long-term top-line expansion and resiliency.
  
• Persistent automation and material transition trends across key client sectors (e.g., automotive, telecom) could erode long-term demand for traditional metal springs and components, challenging the sustainability of Beijer Alma's current product mix and putting future revenue at risk.

Valuation

• The analysts have a consensus price target of SEK283.333 for Beijer Alma based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of SEK310.0, and the most bearish reporting a price target of just SEK240.0.
  
• In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be SEK8.7 billion, earnings will come to SEK1.0 billion, and it would be trading on a PE ratio of 19.8x, assuming you use a discount rate of 6.5%.
  
• Given the current share price of SEK265.0, the analyst price target of SEK283.33 is 6.5% higher. The relatively low difference between the current share price and the analyst consensus price target indicates that they believe on average, the company is fairly priced.
  
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.