Björn Borg’s Q1 results came in above our expectations, and we view the share price reaction following the report as justified. While we have raised our short-term estimates following the Q1 beat, our mid- to long-term estimates remain largely unchanged. In our view, given the ongoing uncertainty in the operating environment and lack of clear evidence that the company can successfully scale its footwear segment, we believe the stock is already fairly priced for its expected earnings growth (2026e P/E: 17x). As a result, we reiterate our Reduce recommendation and target price of SEK 67 per share.
In Q1, Taaleri continued its rapid strategy execution, and the figures were in line with expectations. The company appears to be preparing for a larger M&A transaction, which could drive the unwinding of its significant undervaluation.
We expect revenue to have returned to growth and adjusted EBIT to have improved from the comparison period, supported by operational efficiency and a better sales mix.
In the big picture, confidence in earnings growth and particularly in cash flow has improved over a little more than the past year. However, the slope of earnings growth is insufficient to turn the valuation positive, as the valuation picture is very tight.
