Translation: Original published in Finnish on 04/29/2026 at 08:51 pm EEST

We reiterate our EUR 8.5 target price and Accumulate recommendation. Operationally, the Q1 report was largely in line with expectations, and estimate changes remained limited. The stock is very cheap by all measures, but the undervaluation will not be resolved without major moves. The company's latest moves suggest it is preparing for a larger M&A transaction, which could well be the necessary spark to correct the undervaluation. However, for now, we are holding back on a stronger stance and await further concrete evidence.

Strategy progressed fast

Taaleri's Q1 figures were well in line with our expectations. Garantia delivered excellent earnings again and continued to grow well in a subdued market. The Renewable Energy figures met our expectations, and Taaleri announced it has begun fundraising preparations for the new SolarWind4 fund. This reinforced our assessment that fundraising will start later this year. Similar to the Q4 report, we believe the most important takeaway from the Q1 report was the progress of the strategy. Taaleri has achieved a clear change of pace since its strategy update, and the strategy has progressed considerably over the past six months or so.

Taaleri announced on Monday that it has signed a new 30 MEUR credit agreement, which can be drawn down during 2026. The company already had credit agreements totaling 40 MEUR, and it has a healthy net cash position (Q1 ~16 MEUR), which should further increase as receivables are collected throughout the year. It is clear that the company does not need new capital to run its business, and thus, the only logical interpretation is that the company is preparing for a larger M&A transaction.  Overall, the company currently has an immediate investment capacity of around 80 MEUR, and this will increase significantly to over 100 MEUR if receivables are collected and divestments materialize.

Limited revisions to forecasts

Only limited changes occurred in our estimates, with the exception of a modeling error in our 2026 estimates. The company's earnings outlook for the coming years is good in Garantia and Renewable Energy, and in addition, earnings should receive significant support from various one-off fees. In addition, cash flow should be very high, as nearly 30 MEUR in receivables are released from the company's balance sheet due to divestments. Overall, we expect the company to generate just over 30 MEUR in EBIT per year in the coming years. The biggest question mark in our estimates is the company's investment portfolio, which will certainly change significantly in the coming years. Revisions to the investment portfolio are the single most important driver for unlocking the sum-of-the-parts value. Our dividend forecasts are cautious, as we expect the company to prioritize investments.

A potential arrangement could unwind significant undervaluation

Our conservative sum-of-the-parts calculation has remained unchanged at just over EUR 10 per share. The majority of the value is derived from Garantia, with the remainder practically divided between Renewable Energy and balance sheet investments. Historically, Taaleri has been priced at a 15-20% discount relative to the sum of its parts, but this discount has now widened to ~30%. The discount is huge, considering Garantia's record-high cash flows and the strong earnings level of Renewable Energy, which relies on continuing earnings. The steep discount to the sum-of-the-parts valuation reflects the market's distrust of the company's investment strategy. Overall, we consider Taaleri's stock to be very inexpensive from virtually all possible angles, but the problem is the lack of share price drivers. We find it difficult to see the market correcting the undervaluation without concrete actions. The potential larger arrangement we are speculating about could well serve as a driver for unwinding the undervaluation. With the company's determined strategy execution and the increased probability of a larger transaction, we believe there are better preconditions for value realization than before.