Reddit price target cut to $180 from $235 at Deutsche Bank

Reddit price target cut to $180 from $235 at Deutsche Bank

On Tuesday, Deutsche Bank (ETR:DBKGn) reduced its price target for SKF AB (SKFB:SS) (OTC:SKFRY) from SEK227.00 to SEK217.00, while maintaining a Hold rating on the shares. This adjustment comes as the bank forecasts a softer performance for SKF in the first quarter of 2025, with expectations of revenue and earnings slightly below the consensus.

Deutsche Bank's analyst predicts that SKF will report Q1 group revenue of SEK24.7 billion, a 2% organic year-over-year decline, and an adjusted EBIT of SEK3.2 billion, representing a 12.9% margin. These figures are 2% and 1% below consensus estimates, respectively. The bank anticipates that Q1 trading conditions for SKF will mirror those of the previous quarter, noting the company’s continued strength in price mix despite declining volumes.

While there are signs of improvement in top-line indicators, such as marginally better Purchasing Managers’ Index (PMI) numbers and price inflation, Deutsche Bank expects limited cost relief for SKF. The bank also foresees foreign exchange rates posing a significant challenge for the company’s full-year results, though with a lesser impact on Q1.

Deutsche Bank has reduced its full-year fiscal year 2025 forecasts for SKF, anticipating a 5% decrease in group revenue to SEK95.7 billion and a 7% cut in adjusted EBIT to SEK12.0 billion. The bank’s commentary suggests that management at SKF has not yet observed any significant impact from tariffs and trade tensions in the Q1 results, but anticipates a more subdued performance for the remainder of the year.

In summary, while acknowledging SKF’s solid execution, Deutsche Bank remains cautious about the company’s stock, opting to keep a Hold rating and lowering the price target to reflect the anticipated challenges ahead.

References:
[1] https://uk.investing.com/news/analyst-ratings/deutsche-bank-cuts-skf-ab-stock-price-target-to-sek217-93CH-3996746