Sandvik, like most other Capital Goods stocks, has suffered YTD as raw material prices have weakened and concerns around demand has been building. We take a more cautious view on 2023e and lower our organic estimate. Though we trimmed our TP to SEK 235 (from SEK 265), we still see c. 35% upside in Sandvik shares and hence maintain our Outperform rating. Q2''22 results on July 15th We forecast Q2 orders of SEK 27.6bn corresponding to organic growth of 5%. We expect organic order growth to turn negative later this year. Sandvik''s revenue has likely been impacted by China lockdowns and we are looking for SEK 25.2bn and adjusted EBITA of SEK 5,014m corresponding to a margin of 19.9%. Sandvik will report a non-recurring charge of SEK 1bn in Q2. We lower our estimates as a recession is looming We think supply issues will soon be replaced by demand issues and have updated our estimates for recent trading and FX. We have lowered our organic estimates significantly and we now forecast negative organic revenue growth of -2% in 2023e. However, a large part of our organic changes are offset by FX, and in total, we lower our adjusted EBITA estimates by 6% for 2023 and by 1% for 2024. We are almost 15% below Visible Alpha consensus adjusted EBITA estimates for 2023 and 10% below for 2024. Performance and valuation We lower our target price to SEK 235 (from SEK 265) as a consequence of lower estimates and higher cost of capital. Our target price corresponds to 14x EV/EBITA 2023e. From here, we see 35% upside in the share and maintain our Outperform rating. Sandvik will spin off Alleima in August, which will increase Sandvik''s profitability and improve its cash conversion. We also expect mid-term structural growth in mining, which is Sandvik''s largest end market. Automotive, which is another important end-market for Sandvik, is already at low production levels and a recovery is expected in 2023.