Deutsche Bank has raised its target price for Swedish industrial giant SKF AB to SEK 220 from SEK 204, maintaining a Hold rating. The revision reflects improved cost efficiencies, resilient pricing strategies, and stable portfolio performance despite macroeconomic headwinds and tariff uncertainties.
Key Highlights:
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The bank noted that SKF continues to deliver positive results in controllable areas such as price/mix optimization, cost management, and strategic portfolio adjustments.
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While volume growth remains subdued, Deutsche Bank expects slightly positive price/mix effects to offset year-over-year declines.
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Foreign exchange headwinds are projected to impact Q2 FY25 earnings by SEK 431 million, exceeding management’s guidance of SEK 400 million.
Strategic Context:
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SKF is expected to announce new cost programs in Q2, aimed at bolstering industrial margins and mitigating tariff-related pressures.
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The company is lapping the benefits of its newer factories, making underlying volume trends and cost development more critical to future performance.
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Deutsche Bank emphasized that normal seasonality patterns may not apply in FY25, suggesting a shift in demand cycles and operational planning.
Market Outlook:
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The revised target price reflects confidence in SKF’s ability to navigate external challenges through internal efficiencies.
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Analysts remain cautious on volume recovery but optimistic about margin resilience and long-term portfolio strength.
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Investors are advised to monitor upcoming earnings guidance and cost program disclosures for further clarity.
Sources: Investing.com, MarketScreener, Business Insider, Deutsche Bank Analyst Note (July 2025)