Translation: Original published in Finnish on 10/28/2025 at 8:53 pm EET.

We reiterate our EUR 8.5 target price and Accumulate recommendation for Taaleri. Despite the strong result, the Q3 report was largely in line with our operational expectations and forecast changes have remained limited. The stock is cheap by all measures, but short-term price drivers are scarce. The key short-term driver is the company's balance sheet movements, and we cautiously await increased activity in this area.

Strong Q3 report in terms of figures

Taaleri's Q3 result was significantly better than our expectations due to fair value changes in its own balance sheet. Operationally, the quarter was largely in line with our expectations, and the report did not contain any major surprises, with the exception of performance fees. The biggest event of the quarter was naturally the CMD at the beginning of September, where the company updated its strategy. Our CMD comment can be found here. We also commented on the Q3 results in more detail on Tuesday morning, and the comment can be read here.

Minor positive adjustments to estimates

We have made many changes to our forecasts, as per usual. However, the changes are mainly explained by the timing of one-off revenues, and the underlying operational forecasts have not materially changed. Next year will be a very strong one for Taaleri in terms of earnings, as the company is expected to exit several major projects (Texas, Fintoil and old wind funds). A major event in 2027 is the first closing of the SolarWind4 fund, which should significantly increase earnings based on recurring fees and improve the earnings mix. Overall, we expect the company to generate just over 30 MEUR in EBIT per year in the coming years. However, it is currently difficult to see a clear upward trend in earnings. Our dividend forecasts are cautious, as we expect the company to prioritize investments.

There will be a lot of movement in the balance sheet

A key variable in our forecasts continues to be the company's balance sheet investments. The company has clearly taken a more active approach to balance sheet investments than before, and it has significant firepower on its balance sheet for investments, as significant performance fee receivables (~27 MEUR) are expected to be realized within the next 24 months. In addition, the company is likely to exit all three of its largest balance sheet investments (Fintoil, Texas and Toriparkki). Thus, the company has an investment capacity of over 100 MEUR over the next 24 months, provided that the divestments materialize as expected. The company's message at the CMD and in connection with Q3 was quite clear – these funds are to be invested. Modeling investments is difficult, and we have taken a conservative approach to this. However, it is clear that changes in the company's investment activities will be the most significant driver for the share in the short term.

The share is cheap but drivers are in short supply

Our conservative sum-of-the-parts calculation has risen marginally, but it is still around EUR 10 per share. The majority of the value is derived from the insurance company Garantia, with the remainder practically divided between Renewable Energy and balance sheet investments. Although Taaleri left the door open for larger structural arrangements at the CMD, we do not believe it is actively pursuing them itself. Thus, we cannot assume that the sum-of-the-parts value will materialize, and we therefore consider it justified for now to price the company below its sum-of-the-parts. Taaleri has historically been valued at a 15-20% discount relative to its sum-of-the-parts valuation, and we consider this level justified for now. Absolutely, the stock's valuation is cheap, but we note that the significant share of non-recurring revenues weighs on the acceptable valuation. 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. However, we find it difficult to see the market correcting the undervaluation without concrete actions. The company's investment portfolio and its movements, both on the buy and sell side, will again play a key role here.