* METSO (OP, TP EUR24.0): We upgrade Metso to Outperform as we see an attractive value case in the shares that we expect to be realised as the company's earnings stabilise this year after a 3-year long downturn. We also see balance sheet optionality in Metso with up to €500m acquisition fire power. We reduce our 2016/2017 estimates by 5% but with higher confidence in new forecasts and consensus now only 3-4% above, we recommend buying the last downgrade.
* SANDVIK (N, TP SKR79.0): We upgrade Sandvik to Neutral and increase our TP to SEK79. Having run blue and grey sky scenarios using peer multiples we see risk/reward as balanced. While we think new management can improve FCF conversion materially vs last cycle, we are less positive on Sandvik Machining Solutions (SMS) and on the group 7% 2015-18E EBIT CAGR target (CSe 4.2%). We reduce our 2016E-18E EBIT by 3% and change our TP methodology to SOTP.