NIBE's Q2 results came in below our expectations, leading us to revise our estimates downward. However, the company's outlook suggests that the market has bottomed out, supported by the end of destocking and anticipated declines in interest rates, which should boost consumer demand. Medium-term valuation multiples (2025: P/E: 26x and EV/EBIT: 20x) align with the company's long-term medians and appear neutral in our view. Considering this, and a combination of earnings growth and dividends, should give around 10-15% total shareholder return, exceeding our required return.

NIBE will report its Q2 results on Friday at 8.00 CEST. We expect NIBE’s Q2 results to be weaker than the strong comparison figures due to a decline in revenue. While NIBE does not offer specific numerical guidance, the company usually shares commentary on market activity and provides some insight into future expectations. We expect the company to maintain the outlook it gave in its Q1 report, indicating that destocking will conclude by Q2 and that demand will gradually improve in the second half of the year. Our primary focus will be on updates regarding demand and the destocking situation, as we view these as the key highlights of the upcoming Q2 report.

NIBE's Q1 results were operationally below our expectations, and we have lowered our short-term estimates. However, the company's outlook shows signs of a recovery in the destocking situation in H2'24, but overall the current year will still be challenging. Eventually, the market will pick up and the normalization of capacity utilization and the cost savings program should provide leverage for profitability improvements in the medium term. In our view, given the ongoing uncertainties in the operating environment and current interest rate expectations, the stock is already sufficiently priced in for earnings growth (2025e P/E: 30x).

NIBE will report its Q1 results on Thursday at 8.00 am CEST. We expect NIBE’s Q1 performance to be weaker than the strong comparison figures, primarily due to the weakness of the European heat pump market. While NIBE does not offer specific numerical guidance, the company usually shares commentary on market activity and provides some insight into future expectations. We expect the company to maintain the outlook it gave in its Q4 report. This suggests that the European heat pump market may be in for several more challenging quarters, potentially extending through the remainder of the year. In addition, we will closely monitor any comments on the destocking situation within the value chain.

The Q4 figures offered no major negative surprises and was overall in line with our and consensus forecast. However, the company’s comments regarding the outlook for European Climate Solution sales, as well as the planned action program indicates a continued weak market situation during the year.

We have updated our short- and medium-term forecasts for NIBE, in the light of that market indicators currently shows a slower European heat pump market than expected.