Citi has downgraded its recommendations for industrial heavyweights ABB and Sandvik following recent share price gains, EFN reports.
The bank assesses that the rallies have brought the stocks toward more reasonable valuations.
For Sandvik, the recommendation is lowered to neutral (from buy), while the price target is raised to 405 SEK (from 355). In its analysis, Citi notes that expectations have climbed ahead of the Q1 report, aligning more closely with the bank's own forecasts.
"Combined with the subsequent share price appreciation, we now see a balanced risk/reward profile," Citi writes.
ABB is downgraded as the company is deemed fully valued despite an improved margin outlook.
"At an EV/EBITA multiple of 21.5x for 2026, the valuation is near historical peaks, and the valuation premium relative to Schneider Electric, which we view as ABB's closest peer, is at record levels," Citi notes.
Meanwhile, Barclays has upgraded its recommendation for ABB to equal weight (from underweight) with a higher price target of 67 CHF (from 57).
Sandvik AB is one of the world's leading manufacturers of machines-tools and industrial tools. Net sales break down by family of products as follows:
- machines and tools for mining and infrastructure (51.8%; No. 1 worldwide): drilling semi-trailers, rock perforation tools, excavators, lifting machines, etc.;
- cutting tools and machine-tools (39.5%): intended for machining metals;
- equipment for rock and mineral processing (8.7%): crushing and screening equipment, fixing tools, etc.
Net sales are distributed geographically as follows: Europe (26%), North America (24.9%), Asia (17.6%), Africa and Middle East (12.4%), Australia and New Zealand (12.2%) and South America (6.9%).
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