On Monday, Jefferies, a global investment banking firm, initiated coverage on Epiroc AB (EPIA:SS) (OTC: EPOKY), a leading producer of mining equipment, with a Buy rating and a price target of SEK250.00. The firm highlighted the company's aftermarket business, which is expected to enter a multi-year phase of high single-digit organic growth per annum.
The analyst at Jefferies indicated that Epiroc's profit margins have reached a low point and are projected to recover, with estimates that are 12% higher than the consensus for the company's 2026 earnings. This optimistic outlook is based on the company's strong position in the mining equipment industry, particularly at a time when there is an anticipated copper shortage and a trend among miners to adopt electric and automated machinery.
The investment firm's coverage comes as the mining industry is undergoing significant changes, with a focus on more sustainable and efficient operations. Epiroc has been recognized as one of the top manufacturers in this sector, well-positioned to benefit from these industry shifts.
Epiroc's stock is expected to perform well according to Jefferies, as the company stands out among its peers. The firm's favorable view is also influenced by the potential growth in the company's aftermarket business, which provides ongoing revenue beyond initial equipment sales.
The Buy rating and the SEK250.00 price target suggest that Jefferies sees a substantial upside to Epiroc's current share price, signaling confidence in the company's future performance and the mining equipment market's prospects.
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