Translation: Original published in Finnish on 7/14/2026 at 7:50 am EEST.

GRK will publish its Q2'26 results on Tuesday, July 28, at 8:30 am EEST. Following the KSBR acquisition, the company issued new guidance for the current year, which positively surprised us, especially regarding profitability. We have revised our estimates upwards for both the current year and the coming years. In the short term, the company is supported by a strong order flow and inorganic growth. In addition, we expect the end markets to continue to develop favorably in the coming years. Despite the recent share price increase, significant earnings growth in our forecasts lowers the multiples to a still attractive level. Following the forecast revisions, we raise GRK's target price to EUR 20.0 (from EUR 16.0). We maintain our Accumulate recommendation.

New guidance offered a positive surprise

GRK now estimates that its 2026 revenue will be in the range of 820-1,020 MEUR and its adjusted EBIT will be 70-95 MEUR. The previous guidance pointed to revenue of 720-870 MEUR and an adjusted EBIT of 45-60 MEUR. Before the release, we expected revenue of 874 MEUR and adjusted EBIT of 61 MEUR for the current year, including an estimate of the impact of the acquired business. Thus, the new guidance clearly exceeded our previous expectations. GRK justifies this with a strong order book and an estimate of its realization, the accumulation of new contracts during 2026, the progress of projects in the development phase, and the continued growth in KSBR's revenue and EBIT. At the midpoint of the guidance range (revenue 920 MEUR, adj. EBIT 83 MEUR), the adjusted EBIT margin would be ~9.0%. In our view, this level is high for an infrastructure constructor and indicates continued profitable growth for both GRK and KSBR. KSBR's relative profitability last year was clearly higher than GRK's (EBIT-% 8.8%).

Growth continues in our forecasts in H2

We estimate GRK's Q2 revenue to have decreased year-on-year, as work on the Stegra project is more heavily weighted towards H2 this year. For the full year, we expect the company's revenue to grow by 5% to 915 MEUR (previously +0%, 874 MEUR). The forecast is supported by recent order intake and our stronger growth expectation for KSBR for the current year. During the quarter, GRK announced, among other things, that it had won the improvement contract for Main Road 5 (68 MEUR) and signed an agreement for the second implementation phase of the eastern section of the Vantaa light rail (79 MEUR). In addition to multi-year major projects, we believe the market was favorable for small and medium-sized orders during the quarter.

However, the revisions to relative profitability were significantly more substantial than those to growth forecasts. Despite the weaker-than-expected revenue development in Q2, we expect adjusted EBIT to reach almost the same level as in the comparison period. For the full year, we expect the company's adjusted EBIT to reach ~80 MEUR, with a margin of 8.7% (previously 61 MEUR and 6.9%). The increase in the profitability forecast is driven by revenue growth and KSBR, which operates with better profitability than GRK and will be consolidated into the figures starting in July. We have also revised our forecasts upwards for the coming years. We expect GRK's growth to accelerate next year, supported by inorganic growth. The company has also successfully offset the shortfall that the Stegra project, ending this year, is expected to leave behind with new orders. Despite the revenue growth, we expect margins to moderate in the coming years from what we believe is an exceptionally strong current level, although they will remain clearly above the company's target level in our forecasts (adj. EBIT margin >6% over time).

Earnings growth continues to bring multiples down to an attractive level

Despite the recent strong share price increase, we still see the stock's risk/reward ratio as good. Based on our updated forecasts, GRK is valued at around 7x adjusted EV/EBIT and 11x P/E for 2026-2027 (fair value range 9-12x EV/EBIT, 11x-14x P/E). The expected return, formed by attractive valuation and a dividend yield of ~4%, still clearly exceeds our required return.