BofA Securities moved to upgrade select mining-equipment names this week, promoting Epiroc AB from Underperform to Buy and lifting FLSmidth from Neutral to Buy. The broker tied the rating changes to a projected sequence of final investment decisions across a significant copper project pipeline over the next four years, which it estimates could lift upstream original equipment orders meaningfully in 2026 and 2027.
The firm increased its price objective for Epiroc to SEK330 from SEK225, versus a current share price of SEK278, implying roughly 20% upside. For FLSmidth, the price objective was edged up to DKK600 from DKK590, against a current share price of DKK514.
BofA also reiterated its Buy recommendation on Weir, keeping a price objective of 3,600 pence compared with a current price of 2,386 pence.
Tracking the copper pipeline, BofA identified nearly 30 projects led by 11 miners that together represent more than $100 billion in potential project capital expenditure and are expected to reach final investment decision over the next four years. Of those, five projects are highlighted as likely to be sanctioned before year-end and collectively represent $14.50 billion of project capex:
- Vicuña Phase 1, Argentina - $7.10 billion (BHP/Lundin)
- Bagdad Expansion, United States - $3.50 billion (Freeport)
- Coroccohuayco, Peru - $1.80 billion (Glencore)
- SAN NICOLAS, Mexico - $1.30 billion (Teck/Agnico Eagle Mines)
- Sierra Gorda Fourth Grinding Line, Chile - $0.80 billion (South32/KGHM)
Using a bottom-up framework that assessed project capital expenditure, mine type, and market share for equipment, BofA concluded that Sandvik and Epiroc combined could see upstream original equipment orders rise by about 2% in 2026 and by about 9% in 2027. The bank singled out Epiroc as the main beneficiary of this wave, citing copper exposure and market position: copper accounts for 36% of Epiroc’s sales versus 21% for Sandvik, and Epiroc has more than 50% market share in surface rotary drilling.
On the specific Epiroc forecasts, BofA’s model projects Equipment and Service orders of SEK56.98 billion in 2026 and SEK64.05 billion in 2027. Those figures run 3% and 7% ahead of Visible Alpha consensus for the respective years. Group adjusted EBIT is forecast at SEK13.77 billion in 2026 and SEK16.64 billion in 2027, which BofA estimates to be 2% and 4% above consensus.
BofA’s SEK330 price objective for Epiroc is supported by multiple valuation approaches: a 20.2 times 2028 estimated EV/EBITA, a 29 times 2028 estimated price-to-earnings multiple, and a discounted cash flow using a 7% discount rate, 4% long-term growth rate, and a 30% long-term post-tax return on capital employed.
For FLSmidth, BofA noted that the company has expanded operating margins by roughly 800 basis points since 2023 following the disposal of its cement business. Despite the margin recovery, FLSmidth is trading at 10.6 times 2027 estimated EV/EBITA, which BofA describes as roughly a 25% discount to mining equipment peers.
BofA’s operating profit forecasts for FLSmidth in 2027 and 2028 are 1.8% and 5.7% above consensus, respectively. The DKK600 price objective is derived by applying 13 times 2027 estimated EV/EBITA, discounted one year, consistent with valuation levels for capital goods peers.
Meanwhile, BofA maintained Neutral ratings on Sandvik and Metso. Sandvik is trading at 15.8 times 2027 estimated EV/EBITA, a level the bank notes is a 27% premium to its 10-year historical average. BofA also flagged that tungsten price volatility could swing Sandvik’s 2027 group profits by more than 10% either way. Metso trades at 13.6 times 2027 estimated EV/EBITA, over 20% above its 10-year historical average of 11 times.
Looking downstream, BofA expects processing and downstream equipment suppliers to see order acceleration from late 2026, observing that processing equipment orders usually lag upstream equipment orders by one to three quarters. For 2028, the bank’s order estimates run ahead of Visible Alpha consensus for several suppliers: FLSmidth by 8.7%, Metso by 6.9%, and Weir by 7.6%.
The revisions in analyst ratings and targets reflect BofA’s view that a cluster of copper project sanctions over the coming years will produce a step-up in demand for mining equipment, particularly benefiting companies with greater exposure to copper and stronger market positions in key product lines.