Citi Research on Monday downgraded Sandvik AB from buy to neutral, saying the stock now reflects a balanced risk-reward after a recent rally pushed shares toward what the broker considers a fair multiple. The note pointed to a mix of positive near-term catalysts and an anticipated slowdown in the mining business versus peers starting in the second quarter.
Sandvik shares were quoted at SKr395.20 as of 08:50 ET (12:50 GMT), which Citi said implies about 2.5% upside to its SKr405 target price. Including an approximate 1.5% dividend yield, the brokerage calculated a total expected return of roughly 4%, according to its April 13, 2026 research note.
Citi quantified the valuation position: "On our 10% above Street 2027E EBITA the shares are now at 15.5x 2027 EV/EBITA, a fair multiple in our view reflecting Sandvik’s MSD organic growth prospects (beyond 2026) and >20% ROCE," the report said.
While downgrading the recommendation, Citi also lifted its earnings-per-share forecasts for the next three fiscal years. The brokerage raised FY26 EPS by 4.8%, FY27 by 7.8% and FY28 by 8.2%. Those revisions were driven primarily by stronger tungsten ammonium paratungstate prices following China’s export controls and by a significant underground equipment order in Colombia.
On Citi’s updated projections, diluted EPS now stands at SKr16.47 for 2026, SKr18.04 for 2027 and SKr19.43 for 2028. Citi contrasted these EPS estimates with Sandvik’s market capitalisation of SKr504.89 billion, equivalent to US$54.44 billion.
The tungsten rally is expected to deliver meaningful margin benefit within Sandvik’s Machining & Intelligent Manufacturing division. Citi estimates more than 100 basis points of margin expansion in M&IM this year, and it expects EBITA contributions from tungsten to exceed SKr3.5 billion in FY26 as the company’s pricing gains precede the lagged response in cost of goods sold. That dynamic helps explain Citi’s forecast for M&IM organic sales to surge 34.8% in FY26 before normalising to about 7% growth in FY27.
Despite those near-term tailwinds, Citi said investor focus will reorient toward Sandvik’s mining division. The broker flagged an expected slowdown in order growth for mining to mid-single digits in upcoming quarters, compared with Epiroc, which Citi anticipates will likely sustain low-double-digit order growth. For the group overall, Citi projects organic sales growth of 24% in FY26 that moderates sharply to 6.1% in FY27.
Valuation work in Citi’s sum-of-the-parts model applies roughly 19x FY27 EV/EBITA to Sandvik Mining & Rock Solutions and Rock Processing divisions, a multiple Citi characterised as broadly in line with Epiroc. For M&IM, Citi uses an 11x FY27 EV/EBITA multiple, slightly above SKF’s 10x, to reflect the current tungsten momentum.
Based on its scenario analysis, Citi’s bull-case target is SKr465, representing 16% upside from current levels, while the bear-case target is SKr298, implying 26% downside.
On the group-level profitability outlook, Citi forecasts EBITA of SKr30.44 billion in FY26 on revenues of SKr145.83 billion, rising to SKr33.09 billion on SKr155.36 billion in revenues in FY27. The brokerage also expects net debt to decline to SKr25.10 billion by the end of 2026, down from SKr35.73 billion at the end of 2025.
Note: The figures, targets and forecasts above are taken from Citi Research’s April 13, 2026 note and reflect the bank’s estimates and valuation assumptions.