Translation: Original published in Finnish on 8/14/2026 at 7:38 am EEST.

We reiterate our EUR 8.50 target price and Reduce recommendation for Koskisen. Although the company's Q2 earnings were weaker than we expected, we did not make significant changes to our near-term estimates. We believe Koskisen still has clear earnings growth potential in the coming years, as the construction cycle eventually recovers and the company's substantial investments of recent years reach fruition. However, the cyclical recovery has continuously receded, and the stock is expensive relative to its weak short-term earnings performance. Thus, we believe the expected return on Koskisen's share remains modest over our target price horizon.

Growth brought no profitability in Q2

In Q2, Koskisen's revenue increased by 16% to 104 MEUR and adjusted EBITDA decreased by ~28% to 7.4 MEUR. Revenue and operative EBIT were below our estimates and those of the consensus. Revenue growth, driven by the acquisition of Iisveden Metsä and volume growth in the Sawn Timber Industry, was slightly slower than we expected. Despite the growth, however, the adjusted EBITDA margin fell to a weak 7.1%, as inflation and weak sales of by-products squeezed margins. The Sawn Timber Industry suffered the most in terms of profitability, but the Panel Industry's margins also remained weaker than estimated.

We left our estimates virtually unchanged

Koskisen reiterated its guidance for the current year, according to which the company expects its revenue to grow in 2026 and the EBITDA margin to decrease from 8.1% last year. Reiterating the guidance was in line with our and the consensus estimates. There were few bright spots in the company's market outlook for the relatively short horizon visible, as the macroeconomic repercussions of the war in Iran (including inflation and rising market interest rates) are increasing the company's cost base and delaying the recovery of the construction sector, which is critical for Koskisen. Additionally, the widening price difference between logs and pulpwood due to decreasing pulpwood prices has become a new problem to some extent, putting pressure on the profitability of the Sawn Timber Industry through by-product sales.

We did not make any material changes to Koskisen's near-term estimates despite the Q2 earnings miss. The company's earnings will decline this year, especially on the lower lines of the income statement, but we expect Koskisen's profitability to recover starting next year, driven by the gradual recovery of the construction cycle, efficiency benefits from investments, synergies from the acquisition of Iisveden Metsä, and the easing of the worst inflationary pressures. In our estimates, persistently high raw material prices will limit profitability in the coming years despite revenue growth. Thus, we estimate the company will fall quite clearly short of its margin target (cf. over 15% EBITDA-% over the cycle vs. 2026e-2028e adj. EBITDA-% 6-11%).

Current share price already reflects a higher-than-current earnings level

Koskisen’s EV/EBITDA ratios for 2026 and 2027, which consider the balance sheet structure, are around 11x and 6x, and the corresponding P/E ratios are 54x and 12x. The multiples are clearly above our accepted ranges for this year, considering the company's estimated return on capital and risk profile, and within the ranges for next year. We consider this a challenging overall picture in the short term, given that, due to the uncertain outlook, we believe the forecast risks do not clearly turn positive. Thus, we believe that Koskisen's expected return, consisting of earnings growth, declining multiples (Q2'26 LTM P/E of approximately 70x), and a 1% dividend yield, will be below the required return over a 12-month horizon. The upside to the share's DCF value, which considers a longer-term perspective, is also limited. As the European economy and construction sector recover, Koskisen could have good earnings leverage, but we remain cautious on the stock as signs of a market turnaround are still nowhere to be seen.