RBC ups Alfa Laval to 'outperform' on expected demand surge for energy unit

Alfa Laval AB

18/12/2024 10:41

** RBC upgrades Alfa Laval  ALFA.ST  to "outperform" from
"sector perform", expecting a strong re-acceleration in demand
led by the Swedish engineering group's energy end-markets
    ** It hikes PT by 27% to SEK 570, vs Tuesday's closing price
of SEK 465.4
    ** It expects Alfa Laval's data centre business to grow by a
+50-60% CAGR in 2023-2028 as liquid cooling replaces air-cooling
in AI computing applications
    ** In the long term, it estimates that cooling in nuclear
reactors could grow to 3-4% by mid-2030s vs 2% in 2023
    ** It also expects normalisation in heat pump destocking
after Q2 2025
    ** "We see the group entering a new growth phase, and this
time not driven by green regulations, but market needs," it says
    ** Out of 20 analysts that cover Alfa Laval, eight rate the
stock "strong buy" or "buy", ​five "hold" and seven​ "strong
sell" or "sell"

 (Reporting by Anna Chaberska)
 ((Anna.chaberska@thomsonreuters.com))