SKF AB (SKFRY) AI Stock Analysis

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SKF AB

(OTC:SKFRY)

73Outperform

SKF AB exhibits strong financial stability and a solid valuation, supported by its zero-debt position and consistent profitability. Technical indicators and earnings call insights reveal mixed momentum and ongoing challenges, including regional growth disparities and cash flow issues. The stock is positioned well for future opportunities, but strategic adjustments may be necessary to sustain growth.

SKF AB (SKFRY) vs. S&P 500 (SPY)

Market Cap

$9.79B

Dividend Yield3.38%

Average Volume (3M)4.92K

Price to Earnings (P/E)16.3

Beta (1Y)1.06

Revenue Growth-4.32%

EPS Growth2.18%

CountryUS

Employees38,426

SectorIndustrials

Sector Strength89

IndustryManufacturing - Tools & Accessories

Share Statistics

EPS (TTM)0.49

Shares Outstanding426,392,060

10 Day Avg. Volume0

30 Day Avg. Volume4,916

Financial Highlights & Ratios

PEG Ratio-10.02

Price to Book (P/B)1.58

Price to Sales (P/S)0.00

P/FCF Ratio20.65

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price TargetN/A

Price Target UpsideN/A

Rating ConsensusN/A

Number of Analyst Covering0

SKF AB Business Overview & Revenue Model

Company DescriptionSKF AB (SKFRY) is a leading global industrial company specializing in the production and distribution of bearings, seals, lubrication systems, and related services. Headquartered in Gothenburg, Sweden, SKF serves a wide range of industries, including automotive, aerospace, renewable energy, and industrial machinery. The company's core products and services are designed to improve rotational motion and reduce friction, leading to enhanced performance and efficiency in machinery and equipment.

How the Company Makes MoneySKF AB generates revenue through the sale of its diverse range of bearings and related products. The company's primary revenue streams include the manufacturing and distribution of bearings, seals, and lubrication systems. SKF also provides value-added services such as condition monitoring, maintenance services, and technical support, which contribute to its earnings. Strategic partnerships and collaborations with major industrial players and OEMs enhance its market presence and drive sales. Additionally, SKF invests in research and development to innovate and maintain a competitive edge in the evolving industrial landscape.

SKF AB Financial Statement Overview

Summary

SKF AB demonstrates robust financial health with significant strengths in balance sheet stability and consistent income statement performance. The absence of debt reduces financial risk, although recent declines in free cash flow warrant attention.

Income Statement

Positive

SKF AB's revenue has shown a steady growth trajectory with a recent slight decline from 2023 to 2024. Gross and EBIT margins have improved over the years, reflecting efficiency and cost control. The net profit margin has remained stable, indicating consistent profitability. However, the recent minor revenue drop might signal a need for strategic adjustments.

Balance Sheet

Very Positive

The company exhibits strong financial stability with no total debt in 2024, improving its debt-to-equity ratio significantly. Equity growth has been consistent, contributing positively to the equity ratio. Return on Equity is solid, highlighting effective use of shareholder funds. The zero-debt position reduces financial risk significantly.

Cash Flow

Positive

Operating cash flow has shown fluctuations, but overall, it supports net income well. Free cash flow has decreased in recent periods, suggesting potential reinvestment or cash management challenges. Despite this, operating cash flows remain healthy, indicating good cash generation from core operations.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
97.99B	98.72B	103.88B	96.93B	81.73B	74.85B
	Gross Profit
27.41B	27.37B	26.34B	24.47B	23.27B	16.99B
	EBIT
10.95B	10.34B	11.08B	8.53B	10.76B	7.07B
	EBITDA
15.57B	14.61B	14.78B	12.28B	13.82B	10.23B
	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	13.32B	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	5.11B	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 Price21.49

Price Trends

50DMA

19.98

Positive

100DMA

19.80

Positive

200DMA

19.09

Positive

Market Momentum

MACD

0.59

Negative

RSI

68.01

Neutral

STOCH

93.94

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SKFRY, the sentiment is Positive. The current price of 21.49 is above the 20-day moving average (MA) of 19.80, above the 50-day MA of 19.98, and above the 200-day MA of 19.09, indicating a bullish trend. The MACD of 0.59 indicates Negative momentum. The RSI at 68.01 is Neutral, neither overbought nor oversold. The STOCH value of 93.94 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SKFRY.

SKF AB Peers Comparison

Overall Rating

UnderperformOutperform

Sector (64)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LECO	76 Outperform	$10.93B	24.16	34.83%	1.49%	-2.29%	-14.49%
SKFRY	73 Outperform	$9.79B	16.34	10.85%	3.38%	-4.32%	2.18%
RBC	73 Outperform	$11.46B	50.39	8.51%	―	4.62%	21.58%
SNA	71 Outperform	$17.00B	17.01	19.15%	2.46%	-0.88%	0.04%
TKR	69 Neutral	$5.15B	15.64	11.85%	1.88%	-3.69%	-11.76%
SWK	68 Neutral	$11.12B	30.52	4.03%	4.63%	-3.04%	―
Sector *	64 Neutral	$4.43B	12.01	5.15%	249.50%	3.98%	-11.60%

* Industrials Sector Average

Performance Comparison

SKFRY

SKF AB

21.09

-0.06

-0.28%

LECO

Lincoln Electric Holdings

203.01

-20.49

-9.17%

RBC

RBC Bearings

368.17

78.89

27.27%

SNA

Snap-on

331.73

58.04

21.21%

SWK

Stanley Black & Decker

71.46

-15.44

-17.77%

TKR

Timken Company

73.68

-15.36

-17.25%

SKF AB Earnings Call Summary

Earnings Call Date:Apr 25, 2025

(Q1-2025)

% Change Since: 12.63%|

Next Earnings Date:Jul 18, 2025

Earnings Call Sentiment Neutral

SKF demonstrated resilience in a challenging market with strong operating margins and innovation initiatives. China and Northeast Asia showed positive growth, but ongoing challenges in multiple regions and a weak cash flow performance offset these gains. Continued efforts in addressing tariff and automotive market challenges are critical.

Q1-2025 Updates

Positive Updates

Resilient Operating Margin

Despite negative organic growth for seven consecutive quarters, SKF reported an operating margin of 13.5%, slightly ahead of the same quarter last year, driven by strong pricing capabilities and effective cost management.

Positive Organic Growth in China and Northeast Asia

After seven quarters of negative growth, China and Northeast Asia achieved a positive organic growth of 2%, driven by strong demand in the automotive sector, particularly in the EV space.

Successful Mitigation of Tariff Impacts

SKF established a tariff command center and introduced price changes and tariff surcharges, effectively managing to navigate the volatile environment without significant financial impact in Q1.

Innovation and Sustainability Initiatives

SKF launched new innovative products in the railway, mining, and industrial electrical motors sectors, enhancing customer value and supporting sustainability goals.

Strong Demand in Aerospace and Rail Sectors

The Americas region continued to see strong demand in aerospace, while rail was a bright spot in India and Southeast Asia.

Negative Updates

Negative Organic Growth in Multiple Regions

EMEA reported a negative organic growth of 7%, with weak demand in major geographies like Germany, Italy, and Turkey. Americas and India also saw negative growth, reversing previous positive trends.

Weak Cash Flow Performance

Operating cash flow was weak at SEK 1 billion, down from SEK 1.8 billion the previous year, due to increased working capital and negative FX effects.

Challenges in Automotive Market

The automotive sector faced a challenging market with a negative growth of 3% and a margin of 5.2%, below the same quarter last year. Achieving the 8% operating margin target is expected to extend beyond 2025.

Separation and Restructuring Risks

The ongoing separation into two businesses is a massive task with potential risks for timeline delays due to the complexity of activities, particularly in IT infrastructure.

Company Guidance

During the first quarter of 2025, SKF reported net sales of nearly SEK24 billion, experiencing a negative organic growth of 3.5%, which was partially mitigated by a strong price mix. The operating margin showed resilience at 13.5%, slightly surpassing the same period last year, driven by effective pricing strategies, portfolio management, and favorable currency effects. However, the quarter faced challenges with weak cash flow due to increased net working capital and FX headwinds. Regionally, EMEA experienced a negative organic growth of 7%, while China and Northeast Asia saw a positive growth of 2%. In contrast, Americas and India reported negative growth, influenced by previous timing effects. The industrial segment, comprising 70% of net sales, showed a strong margin of 16.9%, whereas the automotive segment faced a margin of 5.2% amid challenging market conditions. SKF is actively working on mitigating tariff impacts through strategic price changes and operational adjustments to navigate the volatile geopolitical environment.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.