Translation: Original published in Finnish on 11/6/2026 at 10:02 am EET.

We reiterate our Reduce recommendation for Koskisen and lower our target price for the company to EUR 7.50 (was EUR 8.50). We lowered our near-term forecasts for Koskisen significantly following the largely negative news flow in Q3. The cyclical recovery in the construction sector has continuously receded, and we consider the stock to be expensive relative to its weak short-term earnings performance. Consequently, we believe the expected return on Koskisen shares will be modest over our target price horizon, despite our belief that the company has good earnings growth potential once the construction sector eventually turns around.   

Market faced headwinds in Q3

In October, Koskisen held a call ahead of the Q3 silent period, which we discussed in more detail earlier here. Koskisen will publish its Q3 report on Thursday, November 12. The depression in the construction sector (housing in particular) continued in Q3, more or less as expected, but we estimate that the recent rise in market interest rates will delay the turnaround further into next year. Instead, log prices saw an increase in Q3 after a slight decline in the summer, a trend that is more negative than we had previously expected. Logistics costs have followed a similar trend, rising in Q3 due to the high and rising price of fuel. Considering the above factors, we have adjusted our Q3 forecasts for Koskisen quite significantly downward, as the quarter is expected to be seasonally weak. We expect the company's revenue to have grown by approximately 6% in Q3 and adjusted EBITDA to have fallen by approximately 20% to 2.3 MEUR. We estimate that the Sawn Timber Industry has nearly fallen to the break-even point in a challenging operating environment, while the Panel Industry has the potential to surpass the very low comparison figure, thanks to the birch plywood segment. Our estimates are significantly below consensus.

We slashed our near-term forecasts significantly

We expect Koskisen to reiterate its guidance for the current year, according to which the company’s revenue will grow in 2026 and the EBITDA margin will decrease from 8.1% last year. The company is unlikely to be able to report any improvement in the operating environment in the Q3 report. Due to negative news flow, we lowered our forecasts for Koskisen's adjusted EBITDA by around 6–16% for the current year and the coming years. These changes were most notable in the Sawn Timber Industry, where earnings forecasts were weighed down by declines in volume and price assumptions driven by the construction sector, as well as higher cost projections. In the Panel Industry, the revisions were clearly smaller but still negative. Given the low margins, the changes were clearly more pronounced at the lower lines. The company's earnings will decline significantly this year, but we expect Koskisen's profitability to slowly recover starting next year, driven by a turnaround in 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-% 6-10%).

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

Koskisen’s EV/EBITDA ratios for 2026 and 2027, considering the balance sheet structure, are around 12x and 7x, and the respective P/E ratios are > 100x and 14x. The multiples are clearly above the ranges we accept for this year and at the upper ends for next year, considering the company's estimated return on capital and risk profile. We view this as a challenging short-term picture overall. Thus, we believe that Koskisen's expected return, consisting of earnings growth, declining multiples (Q2'26 LTM P/E of about 70x), and a dividend yield below 1%, 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.