Translation: Original published in Finnish on 9/14/2026 at 7:57 am EEST.

Incap launched a substantial share buyback program in August. From a capital allocation perspective, we consider this move wise when taking into account the company's overall picture and other capital allocation alternatives. The program's estimated impact raised our adjusted EPS estimates for Incap by 1–4% in the coming years. In our view, Incap's share valuation remains low (2026e: EV/S 0.8x, EV/EBITA 9x), so the expected return is good. We revise Incap's target price to EUR 9.50 (was EUR 9.00) and reiterate our Accumulate recommendation for the company. 

Share buybacks make a lot of sense

In August, Incap announced the launch of a share buyback program of a maximum of 15 MEUR, under which the company will acquire a maximum of approximately 5% of its share capital. We view this positively, as Incap's balance sheet remains roughly net debt-free, even after acquiring Laco in H1, and the stock is valued quite low (2026e: EV/S 0.8x, EV/EBIT 9x) following mostly negative earnings and share price performance in recent years. The company also generates cash flow, which, in principle, enables it to handle organic investment needs and working capital fluctuations. Thus, we believe that share buybacks offer the company an attractive expected return compared to other capital allocation alternatives (e.g., investments, acquisitions, debt repayment, dividend).  We commented on the news earlier here.  

Share buyback program included in our estimates but no operational revisions

We have included a scenario based on Incap's share buyback program in our estimates. We are refining the scenario based on the progress of the buybacks. We now expect Incap to complete the program in Q2'26 at an average share price of around EUR 9. We also assume that Incap will cancel the purchased shares. The combined effect of the decrease in the number of shares and the slight increase in estimated net financial expenses is an increase in our EPS estimates for Incap of 1-4% for the coming years. We did not adjust our operational estimates for Incap because the company’s business environment has developed as expected since the Q2 report, despite certain positive signals (e.g., macro data from the European industry and a positive profit warning from peer company Kitron).

We now expect Incap's revenue to grow by 31% this year to 281 MEUR and adjusted EBIT by 2% to 26.7 MEUR. Revenue growth is driven especially by the Lacon acquisition and organic growth turning slightly positive in H2. We project, however, that margin pressures in the Indian factory and raw material availability will keep Incap's earnings in organic decline for the fourth consecutive year, as we believe Lacon's inorganic contribution to the operating result is somewhat positive. In the coming years, we estimate the company will be able to grow organically at a rate of around 6-10% due to a gradual economic recovery and certain customer wins. However, we expect the company's adjusted EBITA margin to remain at around 10% in the coming years due to heightened competition in India. This is clearly a lower expected value than the company's profitability in previous years.

Valuation indicators are all green

Incap’s adjusted P/E ratios for 2026 and 2027 based on our estimates are 13x and 10x, and the corresponding EV/EBIT ratios are 9x and 7x. We believe the multiples are cheap, although the EV/EBIT multiple is doomed to remain in single digits until the organic earnings growth trend of recent years reverses and the prevailing uncertainties ease. The relative markdown of the share is significant based on earnings multiples, and the volume-based premium that traditionally guaranteed high margins for the company has melted away (2026e: EV/S 0.8x). The DCF value also supports a positive view on the stock.