Nibe Industrier

NIBE’s valuation has continued to moderate, while European heat pump market data continues to show positive signals of a recovery, supporting our estimates. Medium-term valuation multiples (2026: P/E 21x and EV/EBIT: 17x) are well below the company’s long-term medians and appear attractive in our view. Therefore, we believe the company’s interesting long-term investment story can be accessed with a good risk/return ratio at the current valuation, and we are updating our recommendation to Accumulate (prev. Reduce) but reiterate our target price of SEK 40.0 per share.

NIBE announced on Monday that it had acquired 70% of the Italian company Selmo S.r.l. We believe that the acquisition is in line with the company's strategy and strengthens the Element business area. However, the deal is very small compared to NIBE’s scale, and it does not have an immediate significant impact on our estimates or view of the company. We will update the acquisition to our estimates in connection with the company’s Q3 report at the latest.

In our last update following the Q2 report, we reiterated our Sell recommendation for NIBE, and since then, the share price has fallen by around -20%. As a result, we believe that the valuation has come down to more neutral levels. However, at current valuation levels, we believe that the total expected return is roughly in line with our required return. As a result, we turn to a Reduce recommendation but reiterate our target price of SEK 40 per share.

NIBE’s Q2 result was largely in line with our expectations, and we made only minor upside revisions to our earnings estimates. The company’s performance, outlook and market indicators continue to show signs of a recovery. However, in our view, the pace of the recovery will likely remain slow, due to a weak consumer confidence, a sluggish new-build market, currency headwinds from a strengthening SEK, and subsidy uncertainty in certain markets. In our view, short-term drivers remain weak, and the stock is already sufficiently priced in for high earnings growth (2025e P/E: 34x). As a result, we reiterate our Sell recommendation and target price of SEK 40.0 per share.

We have made slight downwards revisions to our short-and medium-term forecasts for NIBE, in light of a slower-than-expected recovery. In our view, short-term drivers remain weak, and the stock is already sufficiently priced in for high earnings growth (2025e P/E: 33x). As a result, we believe that the risk/reward is weak. Consequently, we turn to a Sell recommendation (prev. Reduce) and reiterate our target price of SEK 40.0 per share.