Translation: Original published in Finnish on 5/11/2026 at 9:08 am EEST.

Componenta's Q1 report exceeded our forecasts due to excellent profitability and a better-than-expected order backlog. Strong profitability increased our confidence in the scalability of volume growth to the bottom line, and we raised our 2026 earnings estimates significantly and our 2027–2028 estimates more moderately. With our updated estimates, the valuation multiples are at moderate levels, and the long order pipelines in the Defense and Energy industries support continued earnings growth in the longer term, which we believe keeps the stock's risk-reward ratio attractive We raise our target price to EUR 5.50 (was EUR 5.00) and reiterate our Accumulate recommendation.

Order book and profitability exceeded forecasts

Componenta's Q1 revenue grew organically by 15% year-on-year to 33.1 MEUR, slightly below our 33.8 MEUR estimate. Adjusted EBITDA, on the other hand, rose to 3.4 MEUR, exceeding our 2.9 MEUR estimate by around 19%, and the 10.2% EBITDA margin was Componenta's best quarterly figure this decade. The company attributed the better-than-expected profitability to higher sales volumes and production efficiency and quality factors. The two-month firm order book increased to 23.1 MEUR (+33% y/y), exceeding our estimate of ~20 MEUR, which provides Componenta with a strong starting point for Q2. Operating cash flow remained at -1.2 MEUR due to the working capital tied up by production growth, which we do not consider a concern in light of the strengthened profitability profile.

Upward forecast revisions

Componenta reiterated its guidance that the group's revenue and adjusted EBIT will improve from the previous year (2025: revenue 115.7 MEUR, adj. EBIT 4.3 MEUR). Our updated forecasts (revenue 136 MEUR, adjusted EBIT 6.8 MEUR) are in line with the guidance, and with the excellent Q1 performance and an order book that has strengthened by over 30%, we consider achieving the guidance highly likely. Due to the strengthening order book, we slightly raised our revenue forecast for the current financial year, and thanks to Q1's strong profitability, we increased our EBITDA forecast by 11% to 12.7 MEUR. Our EBITDA forecasts for 2027 and 2028 increased more moderately (~7% and ~6%), as we are cautious about raising margin-level forecasts for a longer forecast period based on a single quarter. Q2’26 will be an interesting checkpoint for margins, as volume growth is expected to be strong given the order book. With our updated forecasts, the company is essentially on track to achieve the performance level of its financial targets within the targeted timeframe (2027: revenue 150 MEUR & adj. EBIT-% > 5%). The situation in the Middle East increases forecast risks for the second half of fiscal year 2026 and for 2027, but rapid volume growth has the potential to boost profitability in the short term even higher than we expect. Therefore, in our assessment, the forecast risks are currently skewed more towards the positive than the negative.

Earnings growth keeps the expected return interesting

The adjusted EV/EBITDA multiples for 2026 and 2027 are  ~5x, and the corresponding EV/EBIT multiples are 9x and 7x. The P/E multiples, which consider high financing costs, are 12x and 10x. We estimate that valuation multiples for the coming years are moderate, and based on our 2028 forecasts, we see upside in the multiples. The DCF model value, including factoring debts, is EUR 5.6. The upside in the share price supported by earnings growth and a dividend yield of ~2% turn the expected return to be better than our required return over a 12-month horizon. The long order backlogs in the Defense Equipment and Energy industries limit medium-term risks. In addition, potential upside surprises in profitability keep the risk-reward ratio interesting, in our view.