Sandvik''s Q1 results were better than feared as demand remained strong throughout the quarter. Despite cost inflation, margins were solid (flattered by low overhead costs and FX) as Sandvik has taken mitigating actions. The company expects to fully offset higher cost levels in H2. We have not made any material changes to our estimates and continue to view Sandvik as an attractive investment for the coming twelve months. Demand is holding up well so far Demand is so far holding up in most areas and Sandvik Manufacturing and Machining Solutions'' (SMM) daily order intake pace continued on a positive trajectory into the first two weeks of April. The order intake for Sandvik Mining and Rock Solutions (SMR) exceeded Infront consensus by 14%. The Q1 order level is, however, likely not sustainable. Supply chain constraints continued and book-to-bill was 1.22x in the quarter. Sandvik''s revenue grew organically by 9% but it achieved an organic drop through of only 5%. Sandvik anticipates normalised drop-through rates in H2. We leave our estimates largely unchanged We have updated our estimates for current trading and FX. In total, we increase our adj. EBITA estimate by 1% for 2023. We anticipate continued slowdown in organic order growth rates for SMM and anticipate 4% for this year followed by -2% in 2023, which can be compared to 6% in Q1 2022. Demand for Sandvik''s mining and infrastructure businesses should remain solid. We see ~30% upside potential in the stock over the next twelve months Sandvik shares have been weak YTD and slightly underperformed the sector. With solid results, a relatively attractive valuation, a distribution of SMT and an update on strategic priorities at the CMD in May, we see ~30% upside potential over the next twelve months. We maintain our Outperform rating and a target price of SEK265, which is based on a SOTP-valuation corresponding to 16x EV/EBITA 2023E.