SKF AB (SKF.B) AI Stock Analysis

• Market Cap: kr94.03B
• Dividend Yield: 3.75%
• Average Volume (3M): 1.59M
• Price to Earnings (P/E): 14.7
• Beta (1Y): 1.33
• Revenue Growth: -3.96%
• EPS Growth: 2.77%
• Country: SE
• Employees: 38,426
• Sector: Industrials
• Sector Strength: 90
• Industry: Manufacturing - Tools & Accessories
• EPS (TTM): 4.20
• Shares Outstanding: 426,392,060
• 10 Day Avg. Volume: 1,625,970
• 30 Day Avg. Volume: 1,586,550
• PEG Ratio: -10.01
• Price to Book (P/B): 1.58
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 20.32
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: kr218.00
• Price Target Upside: 5.62% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 9

SKF AB demonstrates robust financial performance with strong profitability and a solid balance sheet. Despite concerns over recent revenue contraction and declining free cash flow growth, the company's technical indicators show positive momentum, though caution is advised due to potential overbought conditions. The stock's valuation is attractive with a reasonable P/E ratio and appealing dividend yield. These factors collectively contribute to a solid overall stock score.

SKF AB Business Overview & Revenue Model

Company Description

AB SKF (publ) engages in the design, development, and manufacture of bearings, seals, lubrication systems, and services worldwide. It operates in two segments, Industrial and Automotive. The company offers rolling bearings, mounted bearings and housings, super-precision bearings, slewing bearings, plain bearings, magnetic bearings and systems, industrial and automotive seals, lubrication management solutions, maintenance products, condition monitoring systems, power transmission solutions, test and measuring equipment, vehicle aftermarket, and waste electric and electronic equipment products. It also provides various services, including application engineering, asset management, condition-based maintenance, mechanical maintenance, remanufacturing and customization, and training solutions. The company offers its solutions for various industries, including aerospace, agriculture, cars and light trucks, construction, food and beverage, general machinery, machine tools, marine, material handling, metals, mining, mineral processing and cement, ocean energy, oil and gas, pulp and paper, railways, trucks, trailers, buses, two and three wheelers, and wind energy. AB SKF (publ) was founded in 1907 and is headquartered in Gothenburg, Sweden.

How the Company Makes Money

SKF AB generates revenue primarily through the sale of its extensive range of products, such as bearings and units, seals, mechatronics, and lubrication systems. The company serves a diverse range of industries, including automotive, industrial, and aerospace, ensuring a broad customer base and steady demand. SKF also offers a range of services, including asset management, engineering consultancy, and training, which supplement its product sales. The company's revenue model is bolstered by its global presence, strategic partnerships, and focus on innovation, ensuring it remains competitive in the market.

SKF AB Financial Statement Overview

Summary

SKF AB showcases strong financial stability with consistent profitability and solid cash flow generation. The income statement indicates stability with a healthy gross profit margin and a strong EBIT margin, though revenue contraction is a concern. The balance sheet reflects low financial leverage and good equity returns. Cash flow management is sound, yet the decline in free cash flow growth warrants attention.

Income Statement

SKF AB's income statement shows a stable financial performance with a healthy gross profit margin of 27.7% in 2024, slightly improving from 25.5% in 2020. The net profit margin has remained stable around 6.6% in 2024, consistent with previous years. Revenue growth rate was modest at -4.0% from 2023 to 2024. The EBIT margin is strong at 10.5% in 2024, although slightly lower than in 2021. Overall, the company demonstrates stability and profitability, but recent revenue contraction may be a concern.

Balance Sheet

The balance sheet reflects a strong equity position with a debt-to-equity ratio of 0.34 in 2024, indicating low financial leverage. The equity ratio improved to 50.0% in 2024, showing increased financial stability. Return on equity was 10.9% in 2024, up from 8.6% in 2020, indicating efficient use of equity. SKF AB maintains a solid financial structure with low leverage and good equity returns, although focus on further improving asset utilization could enhance performance.

Cash Flow

The cash flow statement shows a strong operating cash flow to net income ratio of 1.67 in 2024, indicating robust cash generation relative to net income. Free cash flow decreased by 36.3% from 2023 to 2024, but remains positive. The free cash flow to net income ratio stands at 0.79 in 2024, reflecting adequate free cash generation. SKF AB's cash flow management is sound, yet the decline in free cash flow growth warrants attention.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
97.99B	98.72B	103.88B	96.93B	81.73B	74.85B
	Gross Profit
27.41B	27.37B	26.49B	24.47B	23.27B	16.99B
	EBIT
10.95B	10.34B	11.08B	8.53B	10.76B	7.07B
	EBITDA
14.85B	14.61B	14.34B	11.51B	13.76B	10.08B
	Net Income Common Stockholders
6.38B	6.47B	6.39B	4.47B	7.33B	4.30B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
11.14B	11.03B	13.65B	11.22B	13.66B	14.64B
	Total Assets
113.19B	119.41B	111.90B	110.92B	99.63B	90.56B
	Total Debt
0.00	20.04B	21.69B	21.27B	19.21B	17.82B
	Net Debt
0.00	9.01B	8.38B	11.01B	5.99B	3.77B
	Total Liabilities
54.03B	57.44B	56.95B	56.88B	54.26B	54.84B
	Stockholders Equity
56.90B	59.65B	52.74B	51.93B	43.65B	34.31B
Cash Flow		Free Cash Flow
4.39B	5.70B	8.02B	428.00M	1.36B	4.89B
	Operating Cash Flow
9.99B	10.79B	13.78B	5.64B	5.25B	8.27B
	Investing Cash Flow
-5.22B	-5.60B	-5.87B	-5.35B	-3.15B	-3.01B
	Financing Cash Flow
-7.55B	-7.57B	-4.51B	-3.40B	-3.51B	2.69B

SKF AB Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 206.40
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SE:SKF.B, the sentiment is Positive. The current price of 206.4 is above the 20-day moving average (MA) of 192.11, above the 50-day MA of 197.66, and above the 200-day MA of 198.45, indicating a bullish trend. The MACD of 4.80 indicates Negative momentum. The RSI at 62.76 is Neutral, neither overbought nor oversold. The STOCH value of 84.25 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SE:SKF.B.

SKF AB Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SKF.B	77 Outperform	kr94.03B	14.73	11.14%	3.75%	-3.96%	2.77%
Sector *	64 Neutral	$4.42B	11.99	5.16%	249.23%	4.02%	-11.68%