Translation: Original published in Finnish on 7/29/2026 at 7:30 am EEST.

GRK published a very strong second-quarter result in terms of profitability. We also believe that revenue growth will strengthen in the second half of the year, and the record-high order book also supports our forecasts for next year. In addition to the current order book, market conditions in the company's operating countries remain largely positive, which is why we expect order intake to remain strong in the second half of the year. We believe the stock's valuation is still reasonable, and the dividend yield of some 3-4% makes the expected return attractive. Following the estimate revisions, we raise our target price to EUR 23.0 (was EUR 20.0). We maintain our Accumulate recommendation. 

Exceptionally high profitability in Q2

GRK's revenue in the second quarter decreased to 210 MEUR (Q2'25: 232 MEUR), thus falling short of our 220 MEUR estimate. Overall, H1 revenue decreased significantly in Sweden due to lower volumes from the Stegra project. GRK's revenue developed slightly stronger than our forecasts in Finland during the quarter, while developments in Sweden and Estonia fell short of our expectations.

Despite the decline in revenue, GRK's profitability developed exceptionally strongly in the second quarter. Adjusted EBIT of 24.4 MEUR clearly exceeded our 15.1 MEUR estimate (Q2'25: 16.5 MEUR). At the same time, the adjusted EBIT margin improved significantly to 11.6%, whereas we had expected it to be 6.9%. According to the company, the excellent earnings performance was based on successful project selection, strong operational execution, and efficient project delivery. In addition, the company highlighted data center projects, which had a significant impact on the quarter's revenue and earnings. Driven by operational efficiency and higher financial income than we expected, the second quarter's EPS of EUR 0.46 significantly exceeded our expectation of EUR 0.28.

Order book provides support for this year and next year

GRK kept the guidance it issued in connection with the KSBR acquisition unchanged, as expected. The company expects revenue to be in the range of 820–1,020 MEUR and adjusted EBIT to be in the range of 70–95 MEUR. In our view, the strong earnings performance in the first half of the year, a record-high order book, and generally favorable outlooks in the company's operating countries provide good conditions for GRK to meet its guidance. Q2 profitability exceeded our expectations, and we also slightly raised our forecasts for the rest of the year. We now forecast revenue of approximately 944 MEUR and adjusted EBIT of 90 MEUR for the current year. In addition, we have further raised our forecasts for the coming years (adj. EBIT +13-15% 2026-2028e). We expect the company to continue winning project volumes during the remainder of the year, such that it enters 2026 with an order book clearly stronger than in the comparison period. We estimate the company's profitability to remain at a very good level next year, reflecting the current strong market and the profitability profile of its projects. Despite revenue growth, we expect margins to moderate in the coming years from what we believe is an exceptionally strong current level, although they will remain clearly above the company's target level in our forecasts (adj. EBIT margin >6% over time).

Expected return remains attractive

Despite the recent share price increase, we still see the stock's risk/reward as good. Based on our updated forecasts, GRK is valued at around 8x adjusted EV/EBIT and 11x P/E for 2026-2027 (fair value range 9-12x EV/EBIT, 11x-14x P/E). The expected return, formed by attractive valuation and a dividend yield of ~ 3-4%, still clearly exceeds our required return. The fair value derived from the DCF model (EUR ~23) also warrants a positive recommendation.