Translation: Original published in Finnish on 10/28/2026 at 08:30 am EET

GRK's Q3 revenue fell clearly short of our estimate due to weak performance in Sweden and Estonia, but exceptionally strong profitability brought adjusted EBIT in line with our estimate. The company narrowed its guidance ranges, although our previous estimates already fell within the new ranges, so our estimate changes were minor. The order book scheduled for revenue recognition next year grew significantly during the quarter, which supports our estimates. We believe the pricing of the stock remains moderate, which, together with a dividend yield of around 3-4%, raises the expected return to an attractive level. We reiterate our EUR 23.0 target price and Accumulate recommendation.

Profitability remained exceptionally strong

GRK’s Q3 revenue grew by 12% to 288 MEUR (Q3'25: 25,257 MEUR) but fell clearly short of our 327 MEUR estimate. In Finland, revenue grew strongly, driven by high project volumes and the consolidation of KSBR. In Sweden, by contrast, revenue decreased due to lower volumes in the Stegra project, and in Estonia due to the timing of project work phases (Rail Baltica).

Despite the revenue miss, adjusted EBIT rose to 34.9 MEUR and was in line with our estimate (35.0 MEUR). The adjusted EBIT margin rose to 12.1%, while we expected 10.7%. According to GRK, successful project selections and strong operational execution supported profitability. Project estimates were also specified again as the projects progressed. Reported earnings per share (EUR 0.57) were slightly below our estimate (EUR 0.59) due to larger-than-expected items affecting comparability.

Growth outlook remains intact for the coming years

GRK refined its guidance and now expects its 2026 revenue to be 850-950 MEUR and adjusted EBIT 80-95 MEUR (was 820-1,020 and 70-95 MEUR). We cut our revenue estimate for this year to 917 MEUR (was 944 MEUR) following the third-quarter miss, while our adjusted EBIT estimate remained virtually unchanged at 89.5 MEUR (was 90.5 MEUR). We also added the acquisition of PirkanRakentajapalvelu, completed in early October, to our estimates. Conversely, we do not expect substantial volumes from the Stegra project in Sweden by the end of the year. In addition, the company's work at the Muhos data center site is at a standstill.

The order book decreased from the Q2 record level to 1,067 MEUR as expected, but  still remains more than half higher than a year ago. Based on the company's presentation, approximately 660 MEUR will be recognized as revenue from the order book next year (the share was around 440 MEUR in Q2), as in addition to new orders, we estimate that some of this year's work was postponed to next year. The order book already covers over 60% of our next year's revenue estimate and, alongside acquisitions, supports our estimates, which remained practically unchanged. In the longer term, we expect growth to be supported by electrification investments, which GRK can address both through the substation and transmission network expertise of its currently small Power business and through KSBR's wind farm construction. In addition, KSBR's expertise in demanding concrete construction opens up broader doors for data center projects.

Regarding profitability, we expect margins to moderate in the coming years from their currently exceptionally strong level, but in our estimates, they remain clearly above the company's target level of over 6% in the coming years.

After share price decline, the expected return is still attractive

Based on our updated estimates, GRK is valued at around 8x adjusted EV/EBIT and 11x P/E for 2026-2027 (accepted range 9-12x EV/EBIT, and 11x-14x P/E). The expected return formed by moderate pricing and a dividend yield of around 3-4% exceeds our required return. The fair value derived from the DCF model also warrants a positive recommendation.