Translation: Original published in Finnish on 07/29/2026 at 10:15 pm EEST

Sanoma's Q2 operating result, which remained at the comparison period's level, was below our estimate, which we believe was primarily due to timing factors in the learning business. Reflecting this, we made no material changes to our estimates, and our expectations for strong earnings growth in the current and coming years remain unchanged. Relative to this earnings growth outlook, the valuation of the share is low, which is why we reiterate our Buy recommendation and EUR 11.5 target price. The Q2 interview with Sanoma’s CEO can be viewed here.

Timing-related factors hampered development in Q2

Sanoma's Q2 revenue decreased slightly year-on-year, reflecting a stronger-than-expected decline in Media Finland's revenue in particular. Learning's revenue development, on the other hand, was in line with our expectations, even though, according to the company, about 15 MEUR of its revenue shifted to the next quarter due to timing factors. Against this backdrop, and reflecting increased sales and marketing costs ahead of the peak season, the Learning business's adjusted EBIT remained at the comparison period's level and fell short of our estimate. On the other hand, it was positive that despite a stronger-than-expected top-line decrease, Media Finland significantly improved its margin from the comparison period, reflecting changes in the revenue structure and the segment's continuous efficiency measures. We commented on the Q2 earnings in more detail on Wednesday, which can be read here.

Guidance and outlook reiterated as expected

As expected, Sanoma reiterated its guidance for the current year, which indicates revenue of 1.29-1.34 BEUR and adjusted EBIT of 205-225 MEUR. The underlying assumptions of growing demand for learning materials and a relatively stable advertising market were also expected. Our confidence in the demand growth for learning materials is high, also due to the Q2 figures, whereas the weakness of the advertising market still raises questions about its development, despite the more perky figures in June.

Only minor changes to estimates

We made only minor (+/- 1-3%) revisions to our short- and medium-term estimates at the group level. Based on management's comments, Learning's deferred revenue has already been realized, so we raised its H2 revenue estimates, and as a result, its earnings estimates remained practically unchanged despite falling short of Q2 estimates. Media Finland's estimates were also largely unchanged, as the decrease in revenue estimates was offset by a slight increase in profitability estimates. We estimate Sanoma's adjusted EBIT to rise to 220 MEUR this year (previously 218 MEUR), which is close to the upper end of the earnings guidance range. We believe the good earnings growth outlook for the coming years remains intact, reflecting which, we still expect the average adjusted EBIT growth for 2026-2028 to settle at 7%.

Earnings growth and dividend yield are the drivers of the expected return

Based on the last 12 months' earnings, the share is valued at an adjusted P/E ratio of 14x, and the corresponding adjusted EV/EBITA ratio is 11x. We believe these valuation multiples are relatively neutral for Sanoma, so the expected return for the next few years consists of our estimated earnings growth (2026-2028e EPS CAGR of 16%) and a dividend yield of around 5% Thus, the expected return rises to a very attractive level, considering Sanoma's moderate risk profile. Our DCF model, which is slightly above our target price (EUR 12.1 per share), also suggests a very attractive valuation for the stock.