Atlas Copco (ATCOA): Goldman Sachs raises Atlas Copco estimates and target price on stronger semiconductor-capex expectations

Overview

This company update raises Atlas Copco earnings estimates and the target price as Goldman Sachs incorporates a stronger semiconductor-capex outlook into Vacuum Technique forecasts. The institution remains Buy, while retaining caution on construction-exposed Industrial Technique and Power Technique.

Core views

Goldman Sachs raises its FY26/FY27 adjusted EBIT forecasts by 1%/4% and its 2026/27E sales forecasts by 1%/3%. The principal driver is an upgraded semiconductor-capex outlook: its Semiconductor Capex Tracker has risen by 5.8 percentage points since the prior update to a 29% FY25-29E CAGR, while the GS Semis team has also increased WFE estimates for FY26/27/28. The tracker covers 39 companies and €244bn of 2026E capital expenditure. Goldman Sachs therefore lifts Vacuum Technique sales estimates by 4%/10% for 2026/27E. With higher organic sales growth expected to produce operating leverage, it increases Vacuum Technique adjusted EBIT by 6%/13%. The revised group forecast implies 2026/27E revenue of SEK181,167.5mn/SEK223,456.7mn, compared with prior estimates of SEK179,289.8mn/SEK216,976.1mn. FY26/FY27 adjusted EBIT is forecast at SEK38,356.2mn/SEK50,334.1mn, and EPS at SEK6.03/SEK7.92, versus prior EPS estimates of SEK5.94/SEK7.61. Goldman Sachs expects Atlas Copco to grow above the sector median on 2025-29E organic-sales-growth CAGR. Its 2026 adjusted EBIT forecast is in line with Visible Alpha consensus, while its 2027 estimate is 9% above consensus. It also expects 3Q orders to exceed consensus by 2%, even as the profit-and-loss evolution is expected to be more in line. Outside Vacuum Technique, Goldman Sachs sees potential upside in Compressor Technique from higher large gas-compressor orders. The reasoning is that regional diversification of oil-and-gas capital spending and longer LNG routes following the US-Iran conflict could support demand. The institution is more cautious on Industrial Technique and Power Technique, where higher inflation and rising interest rates are expected to delay a construction recovery. It also highlights Atlas Copco's high share of aftermarket revenues as support for ROIC remaining above the sector median. Goldman Sachs remains Buy and raises the 12-month price target to SEK236 from SEK229, reflecting the higher estimates. The valuation uses a sector-relative EV/IC versus ROIC/WACC methodology based on 6m27/6m28 estimates. The target-price calculation uses a 6.3% implied long-term growth rate, 26.0% 24-month-forward ROIC, 9.0% WACC, a 2.9x ROIC/WACC ratio and a 2.5x multiplier. The resulting implied enterprise value is SEK1,175,457mn and the target equates to 21.9x 24-month-forward EV/EBIT. Atlas Copco trades at a 37% EV/EBIT premium to the multi-industry sector, below its five-year median premium of 47%, and trades below direct semiconductor/datacenter end-market peers on EV/IC relative to ROIC/WACC.

Analysis framework

Goldman Sachs updates division-level sales and profit forecasts using its high-frequency barometers, fundamental screens and Capex Tracker. It links semiconductor-capex assumptions to Vacuum Technique orders, sales and operating leverage, compares its forecasts with Visible Alpha consensus, assesses division-specific end-market conditions, and then applies a sector-relative EV/IC versus ROIC/WACC valuation framework to derive the price target.

Methodology notes

• Industry AnalysisUpstream-Midstream-Downstream Transmission

  Semiconductor capital-expenditure tracker linked to Vacuum Technique demand

  The report treats semiconductor capital spending as an upstream demand indicator for Atlas Copco's Vacuum Technique business, using the expected increase in capex to revise sales and profit forecasts.

• Corporate Fundamentals and FinanceROIC–WACC spread

  Sector-relative EV/IC versus ROIC/WACC valuation

  Goldman Sachs compares the valuation assigned to invested capital with Atlas Copco's forecast return on invested capital relative to its cost of capital, and benchmarks that relationship against sector and direct end-market peers.

• Other

  Goldman Sachs Barometers, Screens and Capex Tracker

  The report uses Goldman Sachs' proprietary toolkit of high-frequency indicators, fundamental and valuation screens, and end-market capex forecasts to update company estimates.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Atlas Copco (ATCOA.ST)

  Primary covered company; forecast upgrades are led by Vacuum Technique's semiconductor exposure.

  Strengths

  Stronger semiconductor-capex exposure, expected Vacuum Technique operating leverage, high aftermarket revenue share and above-sector-median expected organic sales growth.

  Weaknesses

  Industrial Technique and Power Technique face delayed construction recovery under higher inflation and interest rates.

  Comparison

  Trades at a 37% EV/EBIT premium to multi-industry coverage versus a 47% five-year median premium, while trading below direct semiconductor/datacenter end-market peers on EV/IC relative to ROIC/WACC.

  Risks

  Global-growth downgrades, slower semiconductor recovery, Chinese competitive pressure, unfavourable FX and lumpy LNG orders.

Key data

• FY26/FY27 adjusted EBIT estimate revision+1% / +4%Revisions reflecting stronger semiconductor-capex assumptions.
• FY26/FY27 sales estimate revision+1% / +3%Group-level forecast increases.
• Vacuum Technique sales revision+4% in 2026E / +10% in 2027EDriven by the upgraded semiconductor-capex outlook.
• Vacuum Technique adjusted EBIT revision+6% in 2026E / +13% in 2027ESupported by expected operating leverage.
• Semiconductor Capex Tracker29% FY25-29E CAGRUp 5.8 percentage points from the prior update; covers 39 companies and €244bn of 2026E capex.
• FY26/FY27 adjusted EBITSEK38,356.2mn / SEK50,334.1mnFY26 is in line with Visible Alpha consensus; FY27 is 9% above.
• Target priceSEK236Raised from SEK229; based on 6m27/6m28 estimates.
• Implied upside16.8%Calculated from a SEK202 current Class A share price.

Impact & implications

The report argues that a stronger semiconductor investment cycle should disproportionately benefit Vacuum Technique and lift group earnings through operating leverage. Compressor Technique could gain from oil-and-gas and LNG demand, but construction-linked businesses remain a relative constraint. Goldman Sachs considers the revised forecast and valuation support sufficient to retain its Buy rating and raise the target price.

Risks

• Downward revisions to global growth expectations or a worse-than-expected cyclical recovery.
• A slower-than-expected recovery in the semiconductor market.
• Material market-share loss to Chinese competitors.
• Unfavourable foreign-exchange movements.
• Lumpy LNG orders.

What to watch

• 3Q order intake relative to consensus, which Goldman Sachs expects to beat by 2%.
• Further changes in semiconductor-capex and WFE forecasts and their effect on Vacuum Technique demand.
• Large gas-compressor and LNG order development.
• The timing of a construction recovery for Industrial Technique and Power Technique.