Translation: Original published in Finnish on 07/28/2026 at 08:15 am EEST

Source: Inderes & Bloomberg, 4 analysts (consensus)

Framery's Q2 report delivered softer-than-expected revenue, but supported by price increases, earnings exceeded our estimates. We have slightly lowered our estimates for the coming years, as a result of which we are revising our target price to EUR 8.0 (was EUR 8.5). Despite the estimates change, the share's valuation still appears moderate given the high quality of the business, and we therefore reiterate our Accumulate recommendation.

Profitability was strong despite sluggish revenue development

Framery's Q2 revenue decreased by 4% to 51 MEUR, which was below our 55 MEUR estimate. Revenue, adjusted for a customer who placed exceptionally large orders, which better indicates normalized demand, grew by 7%, but this was below our 13% estimate and Q1's 15%. The quarter was noisier than usual from a demand perspective, as the European macroeconomy and the regional conflict in the Middle East weighed on the company's sales, but successful price increases protected margins as the product sales mix softened. The comparable EBIT of 12 MEUR exceeded our 11.1 MEUR estimate. Reported EBIT was 14.6 MEUR, supported by a one-off refund of tariff costs from the previous year. Framery's strong cash flow significantly improved its balance sheet during the first half of the year, which is now in excellent condition and provides management with flexibility for larger capital allocation decisions.

The commissioning of the new assembly plant is progressing as planned

During the review period, Framery launched the new Gradus product line aimed at the North American market. Based on management's comments, the new product line has been positively received, although a greater revenue impact is not expected until the first half of next year. The product is assembled at the company's new Michigan assembly plant, which, according to the company, is ramping up as planned, with the first deliveries expected during Q3. Considering the investment in the US assembly plant, it is positive that demand in the Americas remained strong in Q2 (revenue adjusted for the large customer +34%).

We cut our earnings estimates for the coming years slightly

According to Framery, the company's demand environment recovered quickly from the initial shock caused by the war in Iran. However, in our view, the risk of office projects being postponed has increased with the prolonged conflict. Due to this and weaker-than-expected Q2 underlying demand, we have lowered our EBIT estimates for the coming years by 4–9%.

The valuation level appears moderate, but the decelerated growth trend weighs on the risk/reward ratio

Framery's investment profile offers a rare combination of strong growth and generous profit-sharing on Nasdaq Helsinki. We find the stock's earnings-based valuation (2026e: P/E 16x, EV/EBIT 13x) to be moderate considering the company’s profitable growth profile. Our main concern regarding the share's valuation is tied to the gradually decelerating underlying revenue development (2025: +20%, Q1’26: +15%, Q2’26: +7%), which is likely to weigh on the share's valuation until the market is convinced of its stabilization or recovery. However, this concern is balanced by the generous profit distribution enabled by the capital-light business model, and based on our forecasts for the coming years, Framery's dividend yield will be at 5-6%, which we consider an attractive level for a growth company. Our DCF model, which indicates a per-share value of EUR 8.4, also supports the view that the stock has upside and justifies looking beyond the stock's temporary period of weaker earnings growth.