Translation: Original published in Finnish on 11/17/2025 at 7:10 am EET.

We reiterate our EUR 9.00 target price and Reduce recommendation for Koskisen. Koskisen's Q3 report was disappointing in terms of earnings, but this was partly due to one-off factors, and the changes to forecasts for the coming years were ultimately fairly minor. We see clear earnings growth potential for Koskisen in the coming years, as the construction cycle gradually recovers and the company's substantial investments over the past years reach fruition. However, we believe this has already been adequately priced into the share price, which has risen by more than 30% this year, meaning the expected return on the share over a 12-month horizon remains close to the required return. 

Q3 was difficult for Koskisen again this year

In the seasonally slow Q3, Koskisen's revenue increased by 22% to 84 MEUR and adjusted EBITDA decreased by 24% to 2.9 MEUR. Growth and profitability both fell quite clearly short of our and consensus estimates. Q3 was particularly weak in terms of earnings for the Panel Industry, which fell to the break-even point, though this was also partly due to one-off factors. We commented on Koskisen’s Q3 result in more detail on Friday here.

Big picture of forecast scenario largely unchanged

Koskisen reiterated its guidance for 2025 according to which revenue will grow from last year (2024: 282 MEUR revenue) and the adjusted EBITDA margin will be 7-11%. This was entirely expected, and we predict that Koskisen will achieve the guidance. In terms of the market situation, the report did not contain any clear signs of recovery, as construction remains stagnant globally and demand in the logistics sector is also sluggish due to factors such as regulatory uncertainty. Although the decline in the market price of wood is a positive driver, this will only be reflected in Koskisen's income statement after a considerable delay.

We lowered our revenue estimates for Koskisen by 2-4% over the next few years due to rates of expected growth in volumes and prices for both units. The next turning point for the construction sector and Koskisen's main market area in Europe will be positive by default, although we will have to wait until next year for it to happen. The decline in revenue forecasts was reflected in earnings forecasts in the Panel Industry. In the Sawn Timber Industry, the decline in wood cost projections slightly raised forecasts. The group's EBITDA estimates fell by 2-9% in the near term. We expect Koskisen's revenue and EBITDA to continue to grow, driven by the gradual recovery of the construction cycle, investment efficiency gains and the acquisition of Iisveden Metsä (Q3’25 LTM-2027e adj. EBITDA CAGR 25%). Persistently high raw material prices will limit profitability in our estimates despite revenue growth, and we expect the company to fall well short of its margin targets (cf. over 15% EBITDA-% over the cycle vs. 2026e-2027e adj. EBITDA-% approximately 11%). 

Expected return still quite neutral

Koskisen’s EV/EBITDA ratios for 2025 and 2026, which consider the healthy balance sheet, are around 8x and 6x, and the corresponding P/E ratios are 20x and 11x. The multiples are weighted above the ranges we accept for this year and are approximately halfway through for next year, taking into account the company's estimated return on capital and risk profile. We consider this to be a fairly neutral overall picture, given the somewhat balanced positive and negative risks associated with the forecasts. The DCF value of the share is roughly at the level of the current price and our target price, at around EUR 9 per share. Thus, Koskisen's expected return based on earnings growth, falling multiples (Q3'25 LTM P/E >20x) and a dividend yield of around 2% is, in our view, lower than the required return. As the European economy and construction sector recover, the company could see earnings growth continue even further. This would also be a strong medium-term driver for the stock, but for now, we believe the overall picture remains neutral following this year's price increase of over 30%.