Translation: Original published in Finnish on 4/22/2026 at 7:56 am EEST.

Telia will publish its Q1 report on Friday. We expect Telia's revenue growth to have been moderate, with stable earnings development. Our estimates particularly emphasize the strong momentum in the Swedish and Baltic businesses, and we are looking for signs of a gradual turnaround in the Finnish and Norwegian markets. We have included the small Bredband2 acquisition in our estimates. We reiterate our SEK 38.0 target price for the share. However, as the share price has risen, the valuation has become highly stretched, and we are lowering our recommendation to Sell (previously Reduce). 

We expect moderate revenue growth in Q1

We forecast that Telia's revenue grew by 2% to 20,445 MSEK in Q1, supported by the Bredband acquisition. We estimate that currencies created a headwind of around 2%. After adjusting for currencies and the acquisition, we estimate that revenue grew by around 2%. Geographically, we expect Sweden and the Baltics to be the drivers of growth, as they performed strongly in the previous quarter as well. The situation has been more challenging in Finland and Norway. In the Q1 report, we will monitor whether the company's investments in marketing and operational efficiency improvements have begun to pay off in these markets. Based on Elisa's Q1 report yesterday, the competitive situation between operators in Finland has calmed down as expected, easing the pressure on everyone. The company's more comprehensive group-level and country-specific comments can be read here.

Efficiency measures support earnings development less than before

We forecast that Telia’s adjusted EBITDA will increase by 2% to 7,940 MSEK. Thus, we expect profitability to be at the level of the comparison period. The most significant benefits of last year’s substantial cost savings have already been realized, and profitability is now being supported by ongoing efficiency measures, albeit on a smaller scale, amounting to approximately one billion annually. In addition, profitability is diluted by the acquisition of Bredband2, which has lower margins. We estimate that earnings growth in Sweden will remain strong, but group-level development will continue to be constrained by weaker performance in Norway and Finland, though the company has indicated this is expected to gradually improve in 2026. We forecast earnings per share (EPS) at SEK 0.49.

Focus on the reliability of guidance and market recovery

Telia's guidance for 2026 is comparable service revenue growth of about 2% and comparable EBITDA growth of about 3%. We expect the company to reiterate this guidance in the Q1 report. We incorporated the small Bredband2 acquisition into our estimates, impacting our projections by just under 2%.  In addition, we raised our estimates for one-off costs. We expect Telia's revenue to grow by 3.3% and EBITDA by 3.2% in 2026 (consensus +3.0% and 3.6%).

Along with the results, we look forward to hearing comments on the Norwegian RAN network partnership with Ice, expected to generate cost and CAPEX synergies beginning in 2026. Although the arrangement's financial significance is limited at the group level, it strengthens the company’s position in the Norwegian market.

Price increases have pushed valuations to very tight levels

In recent years, Telia has clearly improved its operational performance and delivered on its promises more consistently. This means that the recurring disappointments of the past 10 years have clearly decreased. However, with the rise in the share price (16%), the stock is currently priced (2026e adj.  EV/EBIT 17x and P/E 20x) to reflect continued strong performance. The valuation is 8% higher than that of its closest Nordic peers and Elisa, which we consider a tight valuation. In our view, however, maintaining the growth rate of earnings is challenging now that significant efficiency measures have already been implemented. Although Telia’s risk profile has declined due to its improved focus, a more positive view of the stock would require signs of a faster earnings growth rate (~2%) than we are forecasting in the coming years.