Alfa Laval: share price rises, RBC optimistic

(CercleFinance.com) - On Wednesday, Alfa Laval posted one of the strongest gains on the Stockholm Stock Exchange's OMXS30 index, following a note from RBC highlighting the crucial role the engineering group is set to play in data center cooling.


In a research note, the Canadian broker explains that it expects data centers to move increasingly towards liquid cooling solutions.

The broker also believes that the Scandinavian heat exchange specialist should also benefit from the resurgence of nuclear power.

'We note that these two growth markets - data centers and nuclear power - have until recently represented only niche segments for Alfa Laval', RBC points out.

In its view, these catalysts seem to be ignored by many investors.

In this context, the professional has revised upwards its forecast for Alfa Laval's average annual sales growth to 2035, now expected at 6.4% compared with 5% previously.

It also expects the company's operating margin to improve by 2.4 percentage points over the period, compared with +1.75 percentage points up to now, which leads it to envisage a future revaluation of the share.

As a result, RBC has raised its opinion on the stock from 'performance in line with the sector' to 'outperform', with a price target raised from SEK 450 to SEK 570.

At around 4:00 pm, the stock was up more than 1.5%, making it the fourth-biggest gainer on the Swedish blue-chip index.

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