Koskisen

We reiterate our EUR 9.00 target price and Reduce recommendation for Koskisen. We lowered our near-term estimates for Koskisen slightly, as the guidance for the current year was a bit more cautious than we expected. We see clear earnings growth potential for Koskisen in the coming years, as the construction cycle gradually recovers and the company's substantial investments over the past years reach fruition. However, we believe this has already been adequately priced into the share (2026e: P/E 12x), which is why the expected return on the share will not exceed the required return for the time being.

Koskisen grew in line with estimates, but profitability fell quite clearly short of expectations.

We expect Koskisen's revenue and result to have grown significantly year-on-year in Q4. Growth and earnings performance have been supported, in particular, by strong volume growth in the Sawn Timber Industry and the acquisition of Iisveden Metsä. We anticipate that Koskisen's 2026 guidance will indicate revenue growth and an improved adjusted EBITDA margin at the midpoint of the range. We expect Koskisen to increase its dividend by about 40%, to EUR 0.20 per share. Thus far, we believe that Koskisen's share price has fairly accurately reflected the predicted earnings growth, which remains uncertain especially in terms of scale (2025e and 2026e: adj. P/E 20x and 11x).

On Monday, Koskisen held a pre-silent period call and published the questions and answers discussed during the call. Based on the company's communication, Q4 was largely in line with expectations operationally and market-wise, with no significant surprises. After reviewing the call, we do not see an initial need to adjust our forecasts for Koskisen's Q4.

The investment is a continuation of the company's previously announced three-year investment program, which aims to increase plywood production capacity and improve productivity.

We reiterate our EUR 9.00 target price and Reduce recommendation for Koskisen. Koskisen's Q3 report was disappointing in terms of earnings, but this was partly due to one-off factors, and the changes to forecasts for the coming years were ultimately fairly minor. We see clear earnings growth potential for Koskisen in the coming years, as the construction cycle gradually recovers and the company's substantial investments over the past years reach fruition. However, we believe this has already been adequately priced into the share price, which has risen by more than 30% this year, meaning the expected return on the share over a 12-month horizon remains close to the required return.

Koskisen's Q3 result published this morning was below our and consensus expectations. Koskisen reiterated its guidance as expected, and we anticipate that the company will achieve it despite Q3's setback.