Translation: Original published in Finnish on 10/23/2026 at 8:40 am EEST.

Componenta’s narrowed guidance was in line with our revenue expectations but fell slightly short of our profitability forecasts. We therefore lower our adjusted EBIT estimates for the coming years by 4–7%, and the slowdown in profitability for the rest of the year is a reminder that the earnings turnaround is not progressing in a straight line. The structural demand drivers in the defense and energy industries remain unchanged, however, and the earnings-based valuation is not demanding on next year’s forecasts. We lower our target price to EUR 7.80 (from EUR 8.00) and reiterate our Accumulate recommendation.

Guidance a mild letdown after a strong start

Componenta narrowed its 2026 guidance yesterday and now expects revenue of 135–138 MEUR and adjusted EBIT of 7.6–8.4 MEUR. Previously, the company had guided for both to improve on the previous year (2025: 115.7 and 4.3 MEUR). The guidance was in line with our revenue expectations, with our forecast of 136 MEUR at the lower end of the range. Our adjusted EBIT forecast (8.9 MEUR), by contrast, exceeded the top of the range. The guidance implies adjusted EBIT of 2.3–3.1 MEUR for the second half (H2'25: 2.0 MEUR) and an EBIT margin of ~4% (H2'25: 3.6%). The company did not disclose the reasons, but we consider it likely that profitability is weighed down primarily by Q3 maintenance shutdowns and the summer holiday season, which typically put clear pressure on the quarter. In addition, headcount added ahead of volumes will weigh on profitability for the rest of the year.

Margin forecasts lowered

We lower our H2 adjusted EBITDA margin forecast to 9.0% (prev. 10.0%), which puts current-year adjusted EBIT at 8.2 MEUR, above the midpoint of the guidance range. The cut falls mainly on Q3, where we now expect the adjusted EBITDA margin to fall to 5.8% from a strong comparison period (Q3'25: 7.9%).  In Q4, we expect revenue of ~36 MEUR to lift profitability back to early-year levels. Reflecting weaker current-year margins, we also slightly lower our margin forecasts for the coming years, reducing our adjusted EBIT estimates for 2027 and 2028 by 6% and 4% respectively. Our revenue forecasts are unchanged. More detail on the profitability drivers should come with the Q3 report on October 30. The investment story still rests on demand in the defense and energy industries, with an outlook extending toward the end of the decade. Our margin forecasts are moderate relative to our projected annual revenue growth of 7–10%, as we expect the adjusted EBITDA margin to rise only slightly in 2027–2028. The key risks to our forecasts therefore relate to revenue growth, which could be held back by a delayed recovery in the agricultural machinery market, slower data center investment, or uncertainty over the continuity of defense orders beyond 2028. On the upside, the foundries’ low utilization rate means that a recovery in demand for agricultural and forest machinery could push earnings above our forecasts.

Risk/reward remains attractive

On our estimates, the adjusted P/E is ~14x for the current year and ~10x for next year, with factoring-adjusted EV/EBITDA at ~6.2x and 5.5x respectively. We view P/E as the best measure of Componenta’s valuation, and consider next year’s 10x attractive given the earnings growth outlook for the coming years.  Forecast cuts and a higher required return lower our DCF value to EUR 7.5. In the short term, the expected return, comprising earnings growth and a dividend yield of ~2%, only slightly exceeds our required return, but we believe the medium-term earnings growth potential keeps the risk/reward attractive.