Taaleri Q2'25: No surprises in the report, focus on the upcoming CMD

Translation: Original published in Finnish on 08/13/2025 at 08:45 pm EEST

We reiterate our EUR 9.0 target price and Buy recommendation for Taaleri. The Q2 report was in line with expectations, but the focus is already firmly on the upcoming strategy update. The stock continues to trade at a hefty discount relative to its sum of the parts, and it is also cheap in absolute terms. The key question is how to highlight the undeniable value of the parts. We hope to get a clear answer to this question at the fall's CMD, because without a clear roadmap for unlocking value, a price below the sum of the parts is justified.

Q2 report in line with expectations

Taaleri's Q2 report was well in line with our expectations, and a marginal earnings miss is explained by the effects of the dollar on the investment portfolio. Operationally, the quarter was better than we expected, as Garantia seems to be turning back to growth. We commented on Taaleri’s Wednesday result in more detail here.

As expected, there was no concrete information regarding the strategy yet, and the company will arrange a CMD on September 2. Our view remains that the value of the company’s parts is not reflected in the current group structure.

Big picture for estimates unchanged, capital allocation still a question mark

We have once again made many revisions to our estimates. For 2025, the biggest change is the postponement of the exit from old wind funds to 2026. For 2026-2027, our estimates for Garantia have risen slightly, as the company appears to be achieving growth faster than we expected. 2025 earnings are rather weak in our forecasts, as very little non-recurring income will materialize. Similarly, 2026 will be very strong, as several significant exits are expected to occur then.

As a whole, we predict that Taaleri’s operating result will be 30 MEUR on average in the coming years. Earnings fluctuate significantly on an annual level due to the significant weight of investment operations in the group's earnings. We expect the profitability of private equity funds to gradually improve along with the growth in AUM, but the timing and amount of non-recurring fees will sway annual earnings somewhat. We expect Garantia to return to stable growth as the housing market slowly picks up. Bioindustry investments are a significant variable in the company's investment case and the schedule and magnitude of these are a key question mark in the CMD. Our dividend forecasts remain cautious, as the focus of capital allocation is on investments.

There is value in parts, but the route to materialize it is missing

In this analysis, we focus on the sum of the parts, as it is the best way to consider the value of different parts of Taaleri and the different profiles of the businesses. The value based on our conservative sum of the parts is around EUR 10 per share, which is clearly above the current share price level. The majority of the value is still generated by the insurance company Garantia, while the remainder is effectively split between the energy fund business and balance sheet investments. In absolute terms, the stock is also cheap. We think it is clear that there is significant value in the parts, but the route to materialize it and the timetable are question marks. We hope to get clear answers to this in the CMD this fall. If the company continues with its current structure and own-balance-sheet bioindustry investments are at the core of the strategy, we find it justified that the stock is priced below the sum of the parts. This is because the schedule for bioindustry investments is really long (the potential would be realized at the end of the decade at the earliest), and we also do not see the value of the different parts being fully realized in the current conglomerate-like structure.