Kalmar Q3'25 preview: Back on board after the share price decline

Translation: Original published in Finnish on 10/28/2025 at 8:15 am EET.

Kalmar will publish its Q3 results on October 31, at around 9 am EET. We estimate that the company's market situation has remained largely unchanged and positive, except in the US, where the demand situation is uncertain. Reflecting this, we have made minor negative adjustments to our short-term order estimates. However, we believe the current reasonable valuation of the share provides a buffer against this situation, and we expect the global economic recovery to keep the company's earnings growth on track in the coming years. We reiterate our EUR 39 target price, but following the decline in the share price, raise our recommendation to Accumulate (was Reduce). 

We estimate that the result was more or less flat year-on-year

In connection with the report, we have slightly revised our Q3 operational estimates downwards, mainly due to a US tariff change that shifted some of the company's deliveries. Our full-year estimates for revenue remain unchanged. We now estimate that Kalmar's Q3 revenue has grown by around 3% from the comparison period (was +5% y/y), despite currency headwinds. This is largely in line with consensus (+2% y/y). We now expect the strong order flow of recent quarters to be reflected even more strongly in Q4 deliveries. Similarly, we estimate that the adjusted EBIT margin decreased slightly year-on-year due to tariff policy effects (direct and indirect effects) and settled at 13.3% (vs. consensus 13.1%) In light of this, we forecast that adjusted EBIT settled at around the 58.2 MEUR level of the comparison period (Q3’24: 57.5 MEUR).

Order flow reflects market uncertainty

During the pre-silent period call, the company described the market situation in Q3 as largely similar to before. Thus, its previous comments on a subdued market in H2 due to prevailing uncertainty remained unchanged. Geographically, the company noted that this was particularly evident in the US, whereas the situation in Europe is relatively good. In addition, the quarter was also quieter in terms of order announcements. Consistent with this overall picture, we estimate that Q3's reported order intake declined significantly from previous quarters (cf. Q1'25: 480 MEUR and Q2’25: 450 MEUR), settling at approximately the same level as the comparison period at 414 MEUR (was 423 MEUR, consensus 406 MEUR).

Small negative revisions to estimates

We have slightly decreased our short-term order estimates due to uncertainty related to US demand. In other respects, however, we expect market activity to have remained in line with our previous estimates and for the company's comments to indicate a more cautious approach in the big picture. Furthermore, we estimate that the order book, which strengthened in Q2 (+11% y/y), will support short-term development. Due to the decrease in order estimates, our revenue and earnings estimates for the coming years decreased slightly (1-2%). We estimate that the company's adjusted EBIT margin for this year will be 12.9% (was 13.1%) due to tariff effects, but we still expect the company to easily achieve its guidance (adj. EBIT-% above 12%). We expect earnings growth to remain at good levels in the coming years (2026e-27e adj. EBIT growth: 7-9% y/y), supported by growth in global container traffic, the company's strong market position, and the Driving Excellence program.

Valuation attracts back to the stock

Based on our updated estimates, Kalmar's adjusted EV/EBIT figures for 2025 and 2026 are around 10x and 9x, while the P/E ratios are around 14x and 13x. In our opinion, next year's multiples are at a moderate level, also considering the company's return on capital (cf. previous 12 months ROCE %: ~21%). On the other hand, the upside to the multiples is limited by elevated forecast risks related to trade policy tensions and their spillover effects. However, in our view, the current share valuation already reflects the short-term decline in demand more than necessary. Our positive view is also supported by our DCF model, which is roughly in line with our target price (EUR 39.6/share).