Update shared on 14 Nov 2025
Fair value Increased 1.47%Analysts have marginally increased their fair value estimate for AB SKF to SEK 260.79 from SEK 257, following recent adjustments in price targets in light of mixed outlooks on the company's growth prospects and profit margins.
Analyst Commentary
Recent analyst updates highlight a mix of optimism and caution regarding AB SKF’s growth outlook and share valuation. The varying price target adjustments reflect differing perspectives on the company’s ability to deliver on its strategic goals in the near to medium term.
Bullish Takeaways
- Bullish analysts have raised targets and upgraded ratings, citing expectations of accelerating sales and profit growth in the coming periods.
- Improved momentum in short-cycle European markets is seen as a key contributor to future earnings improvements and market share gains.
- Plans for an automotive spin-off in 2026 are viewed positively. There are expectations that this move will improve the company’s profit margins and reduce exposure to underperforming segments.
- Some analysts consider the stock attractively valued relative to its growth prospects, particularly if operational improvements materialize as anticipated.
Bearish Takeaways
- Bearish analysts have trimmed price targets, reflecting concerns over mixed growth prospects and modest near-term improvements in profit margins.
- There is uncertainty regarding the pace of recovery in certain business segments, which could weigh on overall performance.
- Risks associated with macroeconomic headwinds and ongoing challenges within the automotive division remain key concerns, even ahead of the planned spin-off.
- While some valuation upside exists, execution risks and potential delays in realizing strategic benefits are contributing to more cautious stances from these analysts.
What's in the News
- SKF will showcase clean technologies and circular solutions to accelerate industrial decarbonization at COP30. Its remanufacturing solutions have been recognized as a winner of SBCOP's Best Cases. (Key Developments)
- SKF is launching The Patent Bay, a new platform that will make selected patents freely available to support sustainability-focused technological advancements. (Key Developments)
- AB SKF provided financial guidance for Q4 2025, expecting market demand and organic sales to remain steady year over year. Negative currency impacts are anticipated. (Key Developments)
- SKF announced the discontinuation of production at its Tortuguitas plant in Argentina and will relocate operations to other facilities. This decision will affect approximately 145 employees. (Key Developments)
- The inauguration of the Super-precision centre in Airasca, Italy, marks a new global hub for high-performance bearings and innovation in precision solutions. (Key Developments)
Valuation Changes
- Fair Value Estimate: Has risen slightly from SEK 257 to SEK 260.79, reflecting a modest increase in estimated intrinsic value.
- Discount Rate: Has increased marginally from 6.43% to 6.61%, indicating a modest rise in perceived risk or required return.
- Revenue Growth: Has fallen from 2.87% to 2.19%, suggesting more conservative near-term growth expectations.
- Net Profit Margin: Has declined slightly from 8.95% to 8.84%, pointing to expectations of somewhat lower profitability.
- Future P/E: Has increased from 15.34x to 16.16x, implying a higher valuation multiple for future earnings.
Disclaimer
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