Translation: Original published in Finnish on 7/16/2026 at 8:10 am EEST.

Anora's market development in Q2 was subdued. That said, the risk of cost inflation for the remainder of the year has eased somewhat, which has provided some support for our estimates. However, our full-year estimate is still below the company's guidance. While we see the expected return on the share consisting mainly of the dividend, its risk/reward has weakened due to the increase in the share price. We raise our target price to EUR 3.7 (was EUR 3.6) due to small estimate revisions. We lower our recommendation to Reduce (was Accumulate). 

Market was weak in Q2

As expected, the alcohol market development in Q2 was weighed down by the timing of Easter deliveries, which occurred earlier in Q1 this year. Market volumes for wines and spirits, which are significant for Anora, declined by 6–10% during the quarter in Finland, Norway, and Denmark. In Sweden, the trend was more moderate (-3%). The market has also been declining throughout the first half of the year, reflecting the downward trend in alcohol consumption. Anora has previously stated that the negative impact of the decline in Danish bottling services in the Wine segment and the loss of partners in the Spirits segment continued in Q2. On the other hand, we believe that the trend in market share for Swedish wines has remained positive. Preliminary Q2 figures released by the closest competitor, Viva, support this belief, showing that Viva's organic revenue fell by 8%, despite more favorable progress in its main market, Sweden. Overall, however, market development has been slightly weaker than we had previously expected, which is why we have lowered our revenue estimates for Q2 and the rest of the year somewhat.

Viva Wine also reported a significant decline in its margin in Q2. However, the company did not provide a separate breakdown of developments in the Nordic countries, and part of the decline may be due to the impact of a business acquisition. Nevertheless, Viva mentioned that higher freight costs negatively impacted the result, which we believe may also be reflected in Anora's Q2 earnings. We expect Q2 adj. EBITDA to remain flat year-on-year at 14 MEUR.

Cost inflation risks eased somewhat

In our view, the decline in oil prices from their spring highs somewhat offsets the negative risk posed by cost inflation to Anora. Anora's pricing mechanisms are highly rigid, so it cannot pass on increased costs very quickly. While we still believe cost inflation will pose challenges for the company this year, we have slightly raised our earnings estimates for the end of the year as inflationary pressures ease. Overall, however, our forecast changes remained moderate. We now estimate adjusted EBITDA for the full year to be 72 MEUR, remaining below the company's guidance of 74-79 MEUR. However, Q4 brings the majority of earnings, so success in this quarter can largely determine whether the company will reach its guidance.

Value creation still seems difficult

Although we believe Anora can improve its profitability somewhat, the company's return on capital remains roughly at the level of our required return in our forecasts. We estimate the company's investment needs to be small, and it continues to aim at freeing up working capital, which is only realized to a limited extent in our estimates. The growth outlook for the longer term is also subdued, as we do not believe there is any growth in the alcohol market in sight. In an environment of flat or decreasing volumes, the company must continuously improve its efficiency just to compensate for normal cost inflation. Therefore, after the earnings improvement in the coming years, we estimate earnings and cash flow to remain at the same levels in 2028-2034.

Risk/reward has turned weak

Anora's 2026 P/E 10x is at the level of our acceptable multiples. Anora's dividend yield offers an expected return almost equal to the required return. However, considering the negative market trend and risks associated with earnings development in the short and long term, we believe the share's risk-reward ratio is currently weak.