DB upgrades SKF on planned split, sees valuation upside for industrials unit

SKF AB

18/11/2025 13:52

** Deutsche Bank upgrades Swedish industrial bearings maker SKF SKFb.ST to "buy" from "hold", citing the planned separation of its automotive division as a major value unlock

** The broker sees a roughly 30% upside as the core industrials business is expected to trade at a higher valuation, more than offsetting a de-rating for the smaller automotive unit

** "Worth more on its own, Industrials - it could be your time to shine," DB says, adding that business volumes have likely bottomed out after a prolonged contraction

** DB says the industrial part of SKF is close to a turnaround after nearly two years of falling demand; historically, similar downturns have lasted about eight quarters, and SKF is already at seven, it notes

** The broker raises its PT by 17% to SEK 280 on a new sum-of-the-parts valuation, viewing the 4% organic growth target for the industrial business as achievable

** It says rewards now outweigh risks, as investors are aware of higher investment needs and SEK 6.5 billion ($686.3 million) in separation costs

** Out of 18 analysts that cover SKF, 11 rate it "strong buy" or "buy" and seven "hold" - LSEG data

($1 = 9.4707 Swedish crowns)

(Reporting by Marta Frackowiak)

((marta.frackowiak@thomsonreuters.com))