GS cuts SKF on subdued growth outlook, rising competition

Goldman Sachs cuts Swedish industrial bearings maker SKF SKFb.ST by two notches, to "sell" from "buy", citing a subdued growth outlook, rising competition

The brokerage notes SKF's projected growth of 4.5% annually through 2027 lags the capital goods sector's estimated 6% growth

GS expects long-term competitive challenges to intensify, particularly from China, as SKF has underperformed the global bearings market for eight years

Broker sees potential loss in value for the company's FY 2026 guidance, notes the current valuation does not discount risks to its earnings estimates

The planned automotive division spin-off may not unlock its full value in the near term due to cash costs and a continuing manufacturing agreement between Auto and Industrials units, says GS

Out of the 18 analysts, eight rate SKF "strong buy"/"buy", eight "hold", and two "sell"/"strong sell" - LSEG data