Translation: Original published in Finnish on 8/17/2026 at 7:10 am EEST.

Posti's Q2 result exceeded our expectations, and the profitable growth of the parcel business is strong evidence of the company's potential for earnings growth. We believe the earnings trend will improve towards the end of the year and return to more consistent growth in 2027. In light of this and the generous dividend yield, we consider the stock's expected return attractive. We reiterate our Accumulate recommendation and raise our target price to EUR 13.0 (previously EUR 11.0) with forecast hikes.

Strong earnings turnaround in parcel services

Posti's Q2 was strong overall. Revenue grew by 2%, as expected, due to the continued strong performance of the growing eCommerce and Delivery Services, supported by a double-digit increase in parcel volumes. A positive aspect of the growth was its widespread nature across all delivery categories. In Postal Services, meanwhile, the digital transition of official communications weighed more heavily on volumes than we had expected, but successful price increases kept the segment's revenue decline and earnings trend reasonably moderate. The earnings development of Fulfillment and Logistics Services remained subdued, largely due to the industry's challenges. The group’s adjusted EBIT increased to 13 MEUR (Q2’25: 11 MEUR). This improvement in earnings is primarily attributable to eCommerce and Delivery Services, where volume growth strongly contributed to the result and was also supported by an improved sales mix.

Guidance unchanged, we raised our estimates

Posti reiterated its guidance for 2026, indicating revenue of 1,400–1,500 MEUR (2025: 1,448 MEUR) and adjusted EBIT of 63–79 MEUR (2025: 69 MEUR). To reach the lower end of this range, earnings for the remainder of the year will need to be slightly lower than in the comparison period (4 MEUR). Following a strong Q2 and an improved outlook, we raised our earnings estimates by around 5% per year. The upward revisions were particularly focused on eCommerce and Delivery Services, where volume growth scaled to earnings more strongly than expected. The segment's outlook appears strong in the coming quarters, supported by new customers and market developments. At the same time, we revised our investment forecasts downward, increasing the amount of free cash flow we forecast.

Efficiency measures will support earnings trend in H2

With the renewal program launched at the beginning of the year, Posti aims to achieve savings of 40 MEUR in 2026-29. As part of the program, the company is currently integrating the separate distribution networks of eCommerce and Delivery Services and Postal Services. Some benefits are expected already in H2, but the savings will become more clearly visible from 2027 onwards. In addition, the new self-service model for parcels reduces the direct costs of low-margin C2C deliveries, which, combined with an improved sales mix, supports an upward earnings trend toward the end of the year. Our forecasts also include the assumption of an improving market environment, which seems realistic based on recent economic news. We expect the group's adjusted EBIT to grow at an annual rate of approximately 5% (2025-28e) in the medium term.

Risk/reward is attractive

Based on the last 12 months' results, Posti trades at around 14x P/E and 15x EV/EBIT multiples (IFRS 16 adj. ~12x). The multiples are slightly elevated due to the strong share price increase, but Posti's strengthened earnings growth outlook justifies the increase, in our opinion. We believe that the earnings growth we are forecasting will lower the multiples to attractive levels in the medium term (2027e P/E 10x and IFRS-16-adj. EV/EBIT 9x). In addition, the stock trades at lower multiples than its transport and logistics peers, which we do not believe is entirely justified. In our opinion, a dividend yield of around 8-9% provides a solid basis for the expected return, supported by the liquidation of the property portfolio. We expect the total expected return (~15% p.a.) to exceed our required return (CoE 10%), making the share's risk/reward attractive. Our DCF model and sum-of-the-parts calculation (~EUR 13-14) indicate upside potential for the share, supporting our positive view.