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1. Company Snapshot

1.a. Company Description

Atlas Copco AB, together with its subsidiaries, provides productivity solutions.The company operates through Compressor Technique, Vacuum Technique, Industrial Technique, and Power Technique segments.It offers piston compressors, oil-free tooth and scroll compressors, rotary screw compressors, oil-free blowers, oil-free centrifugal compressors, gas and process compressors, air and gas treatment equipment, and medical air solutions primarily for use in the manufacturing and process industries.


The company also provides oil-sealed rotary vane, dry, and liquid ring vacuum pumps; and turbomolecular and cryogenic pumps, as well as abatement and integrated systems for the semiconductor and scientific, chemical process, food packaging, and paper handling industries.In addition, it offers pneumatic, hydraulic, and electric assembly tools, as well as control systems and associated software for safety-critical tightening; self-pierce riveting tools, dispensing equipment for adhesives and sealants, and flow drill fastening equipment; material removal tools, drills, and other pneumatic products; and machine vision solutions for customers in the automotive and general industries.Further, the company provides portable compressors, boosters, generators, lighting towers, pumps, and construction and demolition tools for civil engineering, oil and gas, construction, manufacturing, exploration drilling, and demolition industries, as well as specialty rental services.


It operates in North America, South America, Europe, Africa, the Middle East, Asia, and Oceania.The company was founded in 1873 and is headquartered in Nacka, Sweden.

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1.b. Last Insights on ATCO

Atlas Copco's recent performance has been influenced by a growing demand for industrial oxygen generators, driven by the rising aquaculture industry needs and the trend towards plug-and-play oxygen generators and membrane-based technology. The company's presence in Nigeria's heavy construction equipment market, driven by rapid population growth and urbanization, offers opportunities for growth. A recent analysis highlights the company's potential in this market, particularly in earth-moving equipment. Additionally, Atlas Copco's industrial products segment benefits from a positive outlook, with a forecasted significant market share in Europe.

1.c. Company Highlights

2. Atlas Copco's Q4 2025: Mixed Demand and Margin Pressures

Atlas Copco reported unchanged revenues and a lower operating profit in Q4 2025, due to negative currency effects, tariffs, and acquisitions. The company's basic earnings per share were SEK 1.36, slightly below estimates. Despite a 4% organic growth, the company's revenues were flat, and operating profit margin was 20.5%. The earnings per share (EPS) was SEK 1.36, while analysts' estimates were around SEK 1.37. The actual EPS came out at SEK 1.3.

Publication Date: Feb -02

📋 Highlights
  • Organic Growth and Segment Performance:: Compressor Technique achieved 7% organic order growth, driven by industrial and Gas & Process compressors, while Vacuum Technique saw 13% growth, though revenues fell 3% due to currency effects.
  • Restructuring Costs and Margins:: Industrial Technique incurred a SEK 261 million restructuring provision, reducing its margin from 19.4% to 15.9%, while Compressor Technique maintained a strong 24.3% profitability.
  • Currency Headwinds:: Q4 faced an 11% currency impact on the bottom line, with a projected SEK 1 billion negative effect in Q1 2026, despite organic growth of 4%.
  • Acquisition Activity and Cash Flow:: Atlas Copco spent SEK 12 billion on acquisitions in 2025 (SEK 8 billion in Q4), with cash flow at SEK 6.8 billion, slightly below the prior year due to working capital changes.

Financial Performance

The company's financial performance was impacted by currency effects, with a negative impact of SEK 1 billion expected in Q1 2026. The cash flow generation was solid at SEK 6.8 billion, but lower than last year, mainly due to changes in working capital and lower operating cash surplus. The company used SEK 12 billion for acquisitions, with SEK 8 billion spent in the last quarter.

Business Area Performance

Compressor Technique saw 7% organic growth, driven by industrial compressors and strong Gas and Process compressors. Vacuum Technique saw 13% order growth, notable in semi equipment, with solid growth in industrial and scientific vacuum and service. However, Industrial Technique saw a 1% order decline, driven by automotive, and Power Technique had a 6% order drop, with challenges in the rental business.

Valuation and Outlook

With a P/E Ratio of 33.87 and an EV/EBITDA of 20.95, the market seems to be pricing in a certain level of growth. Analysts estimate next year's revenue growth at 7.5%. The company's dividend yield is 1.63%, and the free cash flow yield is 3.12%. The return on invested capital (ROIC) is 17.83%, and the return on equity (ROE) is 24.69%. The near-term outlook is mixed, with a more active semiconductor market, but challenges in automotive and industrial segments.

Management's Guidance

Vagner Rego mentioned that the company is increasing local production in the US to mitigate the impact of tariffs on imported compressors. Peter Kinnart stated that the impact of tariffs on margin was similar to Q3, but the company is working to mitigate it through price increases, logistics, and assembly in the US. The company expects overall demand to remain at current levels and has proposed a dividend of SEK 5 per share.

3. NewsRoom

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Are Industrial Products Stocks Lagging Atlas Copco (ATLKY) This Year?

Feb -03

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How Atlas Copco’s Weaker 2025 Earnings And Extra Dividend At Atlas Copco (OM:ATCO A) Has Changed Its Investment Story

Jan -30

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Assessing Atlas Copco’s Valuation As Q4 2025 Results And Extra Dividend Draw Investor Focus

Jan -29

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$14.68 Billion Power and Hand Tools Market Outlook, 2030 Featuring Bosch, Danaher Corp., Stanley Black & Decker, Atlas Copco, Emerson Electric and More

Jan -28

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Atlas Copco AB (ATLCY) Q4 2025 Earnings Call Highlights: Strategic Acquisitions and Solid Cash ...

Jan -27

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Atlas Copco Expects Near-Term Demand to Remain at Current Level

Jan -27

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Blow Air Guns Global Market Forecast, 2025-2030, Featuring Profiles of Stanley Black & Decker, Parker-Hannifin, Ingersoll Rand, Snap-on, Atlas Copco, Robert Bosch, Techtronic Industries, Makita, Apex Tool Group

Jan -20

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Atlas Copco (OM:ATCO A): Exploring Valuation After Recent Share Price Movements

Nov -16

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.00%)

6. Segments

Compressor Technique (Excl. Vacuum Technique)

Expected Growth: 6.0%

The growing demand for energy-efficient and sustainable compressor solutions drives growth. Atlas Copco's strong market position and innovative products, such as oil-free compressors, are expected to fuel growth in this segment.

Power Technique

Expected Growth: 4.5%

The increasing need for reliable and efficient power solutions in emerging markets and the growing demand for rental power solutions are expected to drive growth. Atlas Copco's diversified product portfolio and strong distribution network support this growth.

Vacuum Technique

Expected Growth: 7.0%

The growing demand for vacuum solutions in industries such as semiconductors, pharmaceuticals, and analytics is expected to drive growth. Atlas Copco's innovative products and strong technical expertise support this growth.

Industrial Technique

Expected Growth: 5.5%

The growing demand for industrial automation and digitalization drives growth. Atlas Copco's strong market position and innovative products, such as its Smart Integrated Assembly solutions, are expected to fuel growth in this segment.

Eliminations

Expected Growth: 0.0%

As this segment only includes eliminations, no growth is expected. It is used to ensure accurate reporting and eliminate duplicate entries.

7. Detailed Products

Compressors

Atlas Copco offers a wide range of compressors, including oil-free and oil-injected compressors, for various industries such as manufacturing, oil and gas, and construction.

Vacuum Pumps

Atlas Copco's vacuum pumps are designed for various applications, including industrial processes, laboratory, and medical applications.

Industrial Tools and Assembly Systems

Atlas Copco offers a range of industrial tools and assembly systems for various industries, including automotive, aerospace, and general industry.

Construction and Mining Equipment

Atlas Copco provides a range of construction and mining equipment, including drill rigs, loaders, and haul trucks.

Rock Drilling Equipment

Atlas Copco's rock drilling equipment is designed for surface and underground drilling applications in mining, construction, and quarrying.

Exploration Drilling Equipment

Atlas Copco's exploration drilling equipment is designed for mineral exploration, water well drilling, and geotechnical drilling.

8. Atlas Copco AB's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Atlas Copco AB is moderate due to the availability of alternative products and services in the market.

Bargaining Power Of Customers

The bargaining power of customers is low due to the specialized nature of Atlas Copco's products and services, which limits the ability of customers to negotiate prices.

Bargaining Power Of Suppliers

The bargaining power of suppliers is moderate due to the presence of multiple suppliers in the market, but Atlas Copco's large scale of operations gives it some negotiating power.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the industry, including the need for significant capital investment and technical expertise.

Intensity Of Rivalry

The intensity of rivalry is high due to the presence of several established competitors in the market, leading to a competitive pricing environment.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 23.73%
Debt Cost 3.95%
Equity Weight 76.27%
Equity Cost 8.15%
WACC 7.15%
Leverage 31.12%

11. Quality Control: Atlas Copco AB passed 7 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Alfa Laval

A-Score: 5.3/10

Value: 2.4

Growth: 6.8

Quality: 6.6

Yield: 3.8

Momentum: 3.0

Volatility: 9.0

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Siemens

A-Score: 5.2/10

Value: 3.5

Growth: 5.0

Quality: 5.6

Yield: 5.0

Momentum: 6.5

Volatility: 5.7

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Schindler

A-Score: 5.2/10

Value: 0.8

Growth: 3.9

Quality: 7.4

Yield: 3.1

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Volatility: 10.0

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Atlas Copco

A-Score: 5.2/10

Value: 1.6

Growth: 6.9

Quality: 7.8

Yield: 6.2

Momentum: 2.0

Volatility: 6.3

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Eaton

A-Score: 4.2/10

Value: 1.3

Growth: 5.9

Quality: 7.3

Yield: 3.1

Momentum: 3.0

Volatility: 4.3

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Schneider Electric

A-Score: 4.1/10

Value: 1.5

Growth: 5.6

Quality: 6.6

Yield: 2.5

Momentum: 3.5

Volatility: 5.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

194.45$

Current Price

194.45$

Potential

-0.00%

Expected Cash-Flows