Atlas Copco AB

Atlas Copco's earnings are projected to grow 16.67% in the coming year, supported by record-breaking order intake up 27% to SEK 51bn and a 60% surge in Vacuum Technique. Multiple analysts from JP Morgan, Citigroup, and Handelsbanken have raised price targets, reflecting strong confidence in the company's near-term profit trajectory.

Consensus expectations of 9–11% adjusted EPS growth are viewed as unrealistic in light of recent double-digit earnings declines. The projected recovery appears to be priced in prematurely, and current forecasts may not adequately reflect ongoing cyclical headwinds facing the industrial machinery sector.

Trading at 25 times expected operating profit — below its historical average — Atlas Copco is considered a bargain by Dagens industri. With Vacuum Technique accelerating and compressor and industrial tool cycles set to recover, the current valuation is seen as an attractive entry point relative to long-term growth potential.

Despite trading at a slight discount to historical norms, Atlas Copco's premium valuation remains difficult to justify given the lack of consistent earnings growth. A Hold rating has been assigned, with the view that the stock's current price already reflects an overly optimistic scenario that earnings may not deliver.

A buy signal was issued from a pivot bottom on July 18, 2025, with the stock rising 2.77% since then. Support from accumulated volume at kr134.45 provides a potential buying opportunity, and the stock's controlled movements and high liquidity suggest low overall trading risk for near-term investors.

Atlas Copco holds sell signals from both short- and long-term moving averages, with the long-term average sitting above the short-term average — a classically negative crossover. A sell signal from the 3-month MACD further reinforces the view that the stock is likely to continue underperforming in the near term.