LapWall

LapWall’s Q4 was slightly stronger than we expected in terms of profitability. Although the declining backlog poses a potential downside risk, the company's tender pipeline has shown quarter-over-quarter improvement throughout 2024. Additionally, management...

LapWall's fourth quarter performance was solid, despite net sales falling 13% y/y. The combination of operating leverage and the company's fixed cost discipline continued to support the profitability. Dividend proposal beat our estimates at EUR 0.18 ...

LapWall releases its Q4 result on 6th of February. As the 2024 result is already largely known, our focus lies on orders, market commentary and outlook for 2025. 2025 will be pivotal for LapWall, with new capacity investment completing in the second ...

LapWall’s Q3 was strong as the company was able to improve margins through volume growth leading to improved capacity utilization which was coupled with fixed cost reduction. With short-term uncertainty reduced, we increase our TP to EUR 4.2 while keeping...

LapWall's third quarter performance was solid, with net sales climbing in spite of a difficult market climate. The combination of operational leverage and the company's efficient production led to an uptick in profitability.

LapWall revised its 2024 financial guidance range yesterday, the positive update in terms of profitability guidance eases the short-term uncertainty. The updated net sales forecast matches our current estimate, while the EBITA guidance is significantly...

LapWall releases its Q3 business review on the 29th of October. We expect relatively steady development despite the challenging market. In addition to the figures, our focus lies on order development and market commentary.

We initiate coverage of LapWall with a BUY-rating and TP of EUR 3.8. The sluggish residential construction market at present offers a buying opportunity as the company's valuation seems modest considering the cycle-low earnings.

In our view, LapWall's Q1 report can be interpreted as a slight defensive win given the challenging overall picture for the construction sector. We have not made any material changes to our near-term outlook for LapWall, but the strong start to the year and the guidance provided have lowered the risk level of the stock.

In light of RT’s forecasts, the short-term estimates for construction product companies, i.e. LapWall and EcoUp, still involve downward risks despite recent estimate cuts.

We included the expected investment decision that LapWall sealed last week for the Pyhäntä unit in our forecasts. We expect it to create value for shareholders as profitable growth but expect the benefits to be clearly visible in the figures only from 2027 onwards. In the shorter term, we believe the stock will be driven by the development of the Finnish construction cycle in particular and the company’s earnings outlook for 2024-2025, which depends on it.

The confirmation of the investment was expected and we are positive about the project, even though it is very large by LapWall standards. We will include the project in our LapWall forecasts in the near future, but it will not affect our short-term earnings forecasts. In the longer term, the timing and magnitude of the benefits of the investment relative to our current forecasts will depend in particular on LapWall's ability to gain market share in the Finnish market for prefabricated elements and also on the timing of the turnaround in the construction cycle.

LapWall's Q4 report was slightly weaker than expected as a whole, due to lower order backlog than we predicted, the increasingly bleak outlook for residential construction, and the slight Q4 earnings miss. However, the report had a limited impact on LapWall’s overall picture, and we still expect the company to achieve significant earnings growth with its competitive advantages as the construction cycle turns.

LapWall will publish its H2 report on Wednesday at 9 am EET. Given LapWall's narrow and unchanging guidance for the whole year (2023 adj. EBIT 4-4.5 MEUR), the surprise element with the Q4 figures is quite limited. In its short stock market history, LapWall has only provided earnings guidance after H1, so the guidance is unlikely to give a clear indication of expectations for the current year.

The investment plan is very large on LapWall's scale, and we estimate that it would enable the company to grow above the revenue target of 70 MEUR set for 2026. Limited information makes it difficult to assess the investment in more detail. With LapWall's competitive advantages, aggressively seeking market share has attractive features, especially if customers can be earmarked in advance for the new capacity and the financing of the large project is arranged efficiently.

LapWall will pay the final EUR 0.9 million installment of the KW-Component prefab business in cash instead of shares. We are positive about the change because of LapWall's strong balance sheet and the low valuation of the stock. However, due to the small size of the installment, the pressure on our estimates caused by the change in payment method is small.

The overall picture of the Q3 report published yesterday by LapWall was disappointing as new orders remained low.

LapWall publishes its Q3 business review on Tuesday. We expect that LapWall has performed well in Q3 despite a very mixed market situation, but the company will fall clearly short of the strong comparison figures.

The weak cycle in the construction sector also keeps the risks associated with LapWall’s forecasts elevated especially looking to next year, although so far, the company has been able to reach a tolerable volume due to the relatively normal pull of the roof element segment driven by industrial and public construction.