Epiroc Upgraded to 'Buy' by Kepler Cheuvreux on Mining Cycle Tailwinds

Kepler Cheuvreux has upgraded its rating on Swedish mining equipment manufacturer Epiroc to 'Buy' from 'Hold,' anticipating the company will benefit from favorable conditions in the mining sector. The brokerage also raised its price target on the stock to SEK 300 from SEK 245, implying an 18.6% upside from its current price.

Analyst Rationale

In a note to clients, Kepler Cheuvreux described Epiroc as "a quality mining play with upside optionality." The firm highlighted the company's strong financial health, including a robust capital structure, best-in-class profitability, and strong cash conversion.

The upgrade is underpinned by Epiroc's strategic exposure to what the brokerage calls "the more attractive parts of the cycle." Key drivers identified by the analysts include:

• Demand from copper and gold mining.
• A growing need for equipment replacement amid ageing fleets.
• A recovery in mineral exploration activity.
• A strong outlook for the aftermarket and operational expenditure (opex) services.

Kepler Cheuvreux also pointed to electrification, a potential recovery in the Tools & Attachments division, and future mergers and acquisitions as additional sources of potential upside for the company.

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Revised Financial Forecasts

Reflecting its more optimistic outlook, the brokerage has increased its financial projections for Epiroc. It raised its 2026 and 2027 adjusted EBIT estimates by 5.6% and 14.8%, respectively. The firm now projects a 13.5% adjusted EBIT compound annual growth rate (CAGR) for the 2025-2028 period.

Sales forecasts were also revised upwards, with Kepler Cheuvreux now expecting sales growth of 6.2% in 2026 and 12.8% in 2027. "With the valuation premium narrowing as earnings accelerate, we see an attractive risk-reward profile," the note stated.

Broader Analyst Sentiment

Kepler Cheuvreux's upgrade follows a similar move last month by BofA Securities, which also raised Epiroc to 'Buy' from 'Underperform.' BofA lifted its price objective to SEK 330, citing an anticipated wave of final investment decisions for large-scale copper projects over the next four years.