Translation: Original published in Finnish on 5/16/2026 at 11:23 am EEST.

The recent news surrounding Kempower has been positive, in our view, which supports our growth forecasts for the coming years. We have not revised our earnings forecasts since the Q1 update, so we are reiterating our target price of EUR 15. However, we are raising our recommendation to Accumulate (previously Reduce) to reflect the renewed appeal of the expected return following the share price decline. Attention should next turn to the Capital Markets Day, which will take place in just over a week, when the company will unveil its updated strategy. 

News flow supports our growth forecasts

We expect growth in the coming years, particularly in North America and in Europe outside the Nordic countries. In our view, the recent news flow surrounding the company has been positive, supporting the growth outlook for new orders and revenue in the coming years. To support its scaling in North America and the heavy-duty vehicle sector, Kempower unveiled a new megawatt-level solution (Mega Satellite Flex), which we believe will strengthen the company’s position in that segment. Similarly, the geographical expansion of the Circle K partnership and strategic heavy-duty transport projects, such as the Port of Rotterdam, bolster confidence that demand will remain strong, even in Europe outside the Nordic region.

Kempower guides for 10–30% revenue growth and a significant improvement in adjusted EBIT for 2026. Our estimate anticipates around 26% revenue growth and a positive earnings turnaround, driven by the scalability of a cost structure optimized for significantly higher volumes than current ones. We have not made any changes to our earnings forecasts in this update.

Market share gains have been reflected in margins

The growth has not come for free, as we believe Kempower’s more aggressive growth efforts are partly responsible for the recent decline in the company’s gross margin. In Europe outside the Nordics, Kempower is particularly challenging Alpitronic, which has already achieved a European market share roughly three times larger than Kempower's. Kempower has thus clearly gained market share over the past year, while demand in the Nordic countries has slowed as the passenger car charging network approaches maturity. We believe it is possible that pricing can be improved in the future as new customers become established clients of the company. The company also launched a production cost efficiency program last year aimed at lowering unit costs and thus improving the sales margin. The company expects the program's effects to become apparent gradually throughout 2026.

Kempower will host a Capital Markets Day in just over a week, which we expect will provide more insight into the company's medium-term earnings growth outlook. Our preview of the day is available here.

Valuation has turned attractive

Kempower operates in a rapidly growing market, and we believe the company's competitiveness is strong, even though market share growth has necessitated compromises in margins. Therefore, we believe the company's valuation should be assessed based on earnings forecasts that consider its longer-term potential. The utilization rates of the company's factories are still relatively low in 2025-2026, but in 2028, earnings-based valuation multiples (EV/EBIT) are already falling to cheap levels (12x) compared to our estimated fair value range of 15-20x. Reflecting this, we believe the expected return is attractive again after the recent share price decline.