Alfa Laval Earnings: Energy and Marine End Markets Drive Record Quarterly Order Intake

Wide-moat Alfa Laval reported organic order growth of 9% during the quarter to a record SEK 18.4 billion, a slight increase from the record achieved in the previous quarter. Demand relating to aftermarket services and long-term projects remains healthy, particularly in the energy and marine end markets, which are at the forefront of the energy transition. Similar to other industrial businesses this quarter, the execution of a sizable order backlog from the previous year was the main contributor to the group’s 17% organic revenue growth year over year. While we plan to revise our top-line forecasts to reflect the group’s strong first-half revenue performance, we don’t expect to make a material change to our SEK 280 fair value estimate, which will alter our investment recommendation. Shares currently appear overvalued.