Translation: Original published in Finnish on 3/24/2026 at 9:07 am EET.

Componenta announced an additional order of 20.5 MEUR from the Finnish Defence Forces. This order came as a positive surprise compared to our estimates, although we had expected growth from the defense sector. However, our overall estimates changed little, as we lowered our estimates for other customer segments, reflecting the weakened macroeconomic outlook and increased inflation risks. The easing of forecast risks following the large order, combined with a moderate valuation, keeps the risk-reward ratio attractive, in our view. Reflecting this, we reiterate our target price of EUR 5 and our Accumulate recommendation.

Third major order from the Finnish Defence Forces in consecutive years

Componenta announced on Monday that it had received an additional order worth 20.5 MEUR from the Finnish Defence Forces, with deliveries scheduled for 2026–2028. This order follows those received by Componenta from the Finnish Defence Forces in 2024 (~50 MEUR) and 2025 (~10 MEUR). In total, orders received from the Finnish Defence Forces are worth approximately 80 MEUR, and they will be delivered by 2028. The company stated in its press release that the announced order will not affect the guidance provided for the current year.

Group estimates remain unchanged overall

Componenta has provided guidance for an improvement in revenue and adjusted EBIT for the current financial year. We estimate that revenue will grow by 12% to 130 MEUR this financial year, and that the adjusted EBIT margin will strengthen to 4.4% (2025: 3.7%), supported by improving production efficiency due to increasing production volumes. Overall, our estimates changed minimally, despite raising our growth estimates for the defense equipment industry segment by around 4 MEUR annually for 2026–2028 due to a larger-than-expected order. The minor adjustments to our group-level forecasts were due to downward revisions in our projections for other segments. Thus, the defense equipment industry segment will be increasingly responsible for driving our forecasts for the coming years. 

In our assessment, risks related to investment-driven end markets have increased due to rising energy prices and inflation risks. Estimates were lowered in the machine building and agricultural machinery segments. We estimate that prolonged increases in the general price level and interest rates would delay expectations for growth in these segments, though we still anticipate growth from them in the coming years. The order received from the Finnish Defence Forces reduces forecast risks that were increasing due to weak macroeconomic development.  This underscores the diverse demand drivers of Componenta's customer segments, mitigating the risk level associated with the group's earnings development.

We updated our estimates regarding the use of factoring financing, the exact amount of which was revealed in Componenta's financial statements published last week. The amount of factoring financing at the end of the financial year was lower than we expected
(13.1 MEUR vs. +15 MEUR), resulting in a somewhat stronger balance sheet for the company entering the 2026 financial year than we had previously expected.

Valuation appropriately incorporates earnings growth expectations

After adjusting for the factoring financing amount (13.1 MEUR), the EV/EBITDA multiples for 2026 and 2027 are 5x and 4x, respectively, and the corresponding EV/EBIT multiples are 10x and 8x. P/E multiples that account for high financing expenses are at just under 12x and 9x. The DCF model value, taking into account the factoring debt, is EUR 5.2. The expected return, consisting of earnings growth and dividends for the coming year, exceeds our required return. The low multiple-based valuation and the easing of forecast risks due to the continuation of large orders from the Finnish Defense Forces maintain a favorable risk-reward ratio for the share, despite increased risks associated with our forecasts for other segments due to inflation and interest rate risks.