Alma Media: Guidance upgrade didn't come as a surprise

Translation: Original published in Finnish on 10/14/2025 at 9:30 pm EET.

We have slightly raised our short-term forecasts for Alma Media, in line with the guidance upgrade issued by the company on Tuesday. At the same time, we also made upward revisions to our forecasts for the next few years and our long-term profitability expectations. In line with these estimate changes, we raise our target price for Alma Media to EUR 15.5 (was EUR 13.90), but the earnings growth we forecast is already priced into the share, so we lower our recommendation to Reduce (was Accumulate).

Guidance rose by a notch

On Tuesday, Alma Media raised its 2025 guidance for both revenue and adjusted EBIT. The company now estimates that its 2025 revenue (2024: 312.7 MEUR) and adjusted EBIT (2024: 76.9 MEUR) will be at the 2024 level or grow. Previously, the guidance expected both to be at the 2024 level. We had anticipated after the Q2 report that the company would be in a position to raise its guidance this year, as after the first half of the year its revenue was 4% higher than the comparison period and adjusted EBIT was 8% higher. Alma Media justified the raised guidance by stating that the development of its businesses has continued favorably despite the uncertain operating environment. In addition, acquisitions support its development.

The short-term overall picture has not changed in our view

We do not believe that the raised guidance is due to a specific change in the target markets and thus in demand. Thus, in our view, the raised guidance reflects the strengthening demand outlook for the rest of the year and a small acquisition, and the change in guidance was not particularly large. We have made small positive forecast changes to our organic growth forecasts and accounted for a recent small acquisition. Thus, we expect this year's revenue growth to settle at 5%. Alma Media's revenue is quite high-margin, and the company has also proven its ability to continuously improve its efficiency in recent years. Against this backdrop, we expect revenue growth to leverage earnings, and we forecast adjusted EBIT for the current year to grow by just over 9%.

The evidence keeps strengthening

Alma Media has managed to compensate for the slow growth in demand in recent years with its own commercial successes and acquisitions. In addition, its ability to streamline operations and improve profitability has been impressive. Given the significant development projects and the expected pick-up in demand starting next year, we have raised our medium and long-term profitability forecasts. In total, our 2025-2027 earnings estimates increased by 2-5%, and we also raised our long-term profitability forecasts underlying our cash flow model.

We believe the share is fully priced

Alma Media's adjusted P/E ratio for the past 12 months is 22x, while the corresponding EV/EBIT ratio is just over 17x. These valuation multiples are significantly above the company's long-term historical valuation. We consider the increase in valuation level relative to history justified, but in absolute terms, the aforementioned valuation multiples are demanding. Thus, part of our forecast earnings growth for the coming years is partially overshadowed by a slight downside in valuation, and we believe the share's risk/reward ratio is balanced at the current price. This overall valuation picture is also supported by our DCF model (EUR 15.5) at the level of our target price, in which we have raised long-term profitability expectations above recent historical performance.