Goldman Sachs moved Swedish mining-equipment manufacturer Epiroc AB to a "buy" recommendation from "neutral" on Thursday, increasing its 12-month price objective to SEK315 from SEK230. The new target implies roughly 15.6% upside from Epiroc's May 13 closing price of SEK272.60.
The upgrade follows Epiroc's first-quarter 2026 report, where the group delivered a 23% rise in organic orders and saw adjusted operating margins climb back above 20% - the first time margins have exceeded 20% since the first quarter of 2024.
Equipment orders expanded 44% in the first quarter, and the company recorded a group milestone with SEK1.28 billion in large orders booked during the period. Those operational metrics prompted analysts at Goldman Sachs to revise their view on Epiroc's near-term trajectory.
"Following another strong DD growth print at 1Q26 (+23% OOG) and with group margins back above 20% for the first time since 1Q24, we are now confident that a turnaround is underway," the analysts said.
Goldman Sachs noted Epiroc's modest share-price performance over the prior three years, during which the stock rose just 10.6% to December 31, 2025. Over that same period, Epiroc underperformed the SXNP Index by 54 percentage points and peer Sandvik by 51 percentage points in euro terms. The bank highlighted a stretch in which margins declined in 11 of 13 consecutive quarters.
Following the first-quarter beat, Goldman raised its full-year 2026 revenue forecast to SEK66.62 billion, with projections of SEK74.42 billion for 2027 and SEK79.95 billion for 2028. These figures compare with the bank's earlier estimates of SEK64.44 billion for 2026 and SEK69.26 billion for 2027.
Adjusted earnings-per-share forecasts were also lifted. Goldman now expects adjusted EPS of SEK8.41 for 2026, SEK10.05 for 2027 and SEK11.10 for 2028, up from prior projections of SEK7.88, SEK8.89 and SEK9.71 respectively. Full-year 2026 adjusted EBIT is forecast at SEK13.81 billion, increasing to SEK16.36 billion in 2027 - revisions that represent 7% and 13% increases versus Goldman Sachs' previous estimates.
The bank increased its FY26 orders and sales projections by 6.7% and 3.4% respectively after the quarterly order beat. Service organic order growth for 2026 was revised up by 630 basis points to 9.4%, while equipment organic order growth for 2026 was raised to 23.9% from the prior 8.5% figure.
Goldman expects the group's adjusted EBIT margin to expand from 19.6% in 2025 to 20.7% in 2026, and further to 22.0% in 2027 and 22.4% in 2028. Return on invested capital is forecast to climb from 17.2% in 2025 to 20.1% in 2026, 23.2% in 2027 and 25.0% in 2028.
Valuation assumptions underpinning the upgrade rely on Goldman Sachs' EV/IC to ROIC/WACC framework. The bank applied a multiplier of 2.7 times, up from 2.3 times, to a 24-month forward ROIC/WACC of 2.6 times. That combination implies a target 12-month forward EV/EBIT of 23 times and a price-to-earnings multiple of 30.5 times.
Goldman Sachs also flagged a set of risks that could undermine the recovery. The bank highlighted the potential for a slower-than-expected margin recovery, higher Tungsten costs now modelled as roughly a 100 basis-point headwind to Tools and Attachments margins versus a 50 basis-point assumption previously, foreign exchange exposure, trade tariffs and possible delays to mining capital expenditures.
The broker's revisions reflect a materially more optimistic outlook for orders, margins and returns, driven by the company's most recent quarterly performance. Investors and market participants in the mining equipment, industrials and materials sectors will likely watch upcoming quarters for confirmation that the improvements in bookings and margins are sustainable.