Scanfil Q4'25: Price is a balanced combination of potential and risk

Translation: Original published in Finnish on 2/23/2026 at 8:21 am EET.

In our view, the overall picture of Scanfil's Q4 report published on Friday was neutral and we did not make any material changes to our forecasts following the report. Therefore, we reiterate our Reduce recommendation for Scanfil, and due to the slight further decline in the risk level, we revise our target price to EUR 11.50 (was EUR 11.00). The company's outlook is positive in both the short and longer term, but in our opinion, the stock has adequately priced in the expected earnings growth (2026e: adj. EV/EBITA 12x). Thus, the expected return for the year will not quite rise to a level that is attractive enough from the current valuation level.

Earnings development was horizontal in Q4

Scanfil's revenue decreased by 1% to 211 MEUR in Q4. However, we estimate that the company's volumes increased by about 8% in Q4, as currencies and the elimination of consignment sales, which boosted revenue in the comparison period, clearly dampened revenue. Scanfil's adjusted EBITA developed in tandem with revenue in Q4 as the operating result settled at the level of the comparison period, 15.5 MEUR, corresponding to Scanfil's typical baseline adjusted EBITA margin of 7.3%. The figures did not quite reach our estimates, but there was no drama involved in the Q4 development. The company managed to sell 59 MEUR of new projects in Q4, a 3% decrease from the comparison period. The dividend proposal increased by another cent, further solidifying Scanfil's position among European dividend aristocrats. We commented on Scanfil’s Q4 numbers in more detail on Friday here.

We did not make any forecast changes after the report

Scanfil naturally reiterated the guidance it issued back in January, according to which the company's revenue for the year will be 940-1060 MEUR and its adjusted EBITA 64-78 MEUR. Market commentary was not particularly positive, despite slight signs of recovery in the European economy, but the increased weight of the defense sector (incl. the MB and ADCO acquisitions) and the company's own project wins keep the outlook fundamentally positive, in our opinion. We consider the lower ends of these guidance ranges particularly cautious compared to the pro forma levels achieved by Scanfil, MB, and ADCO last year, assuming no significant geopolitical or general economic risks materialize.

However, even before the report, our forecasts included a fairly positive scenario in which the company would reach approximately the midpoint of its revenue guidance and slightly above the upper end of its earnings guidance. Thus, we did not make any changes to Scanfil's near-term estimates beyond a marginal refinement following the report. We forecast Scanfil's adjusted EPS to grow by around 15% by 2028, driven by acquisitions, a gradually recovering economic situation, and organic growth enabled by project wins. The main risks to our forecasts relate to external demand factors such as the global economy. Internally, we believe the company is in pretty good shape, although the integration of acquisitions still adds a notch to the risk level associated with the company's own operations during H1. 

We believe the share is roughly correctly priced

Based on our estimates for 2026 and 2027, Scanfil's adjusted P/E ratios are 14x and 13x, while the corresponding EV/EBITA ratios are 12x and 10x. The current-year multiples, which are the main focus, are slightly above the company's own 5-year median levels. Correspondingly, we believe that the expected annual return, consisting of earnings growth, the downside in multiples (2025 ACT P/E 18x), and a dividend yield of just over 2%, remains unnecessarily modest. Also, when viewed against the DCF value, the upside in the share has been exhausted. Relatively, Scanfil is undervalued by approximately 10-20% compared to both global contract manufacturers and Nordic core peers. However, the global peer group and many Nordic peers are already priced at quite high levels and clearly above their medium-term averages. Thus, we do not believe that peer valuation alone changes the overall, rather neutral, valuation picture.