Translation: Original published in Finnish on 4/12/2026 at 7:30 pm EEST.

Sanoma's earnings growth outlook for the coming years is very good, as curriculum reforms are being implemented in the major operating countries for Learning, which has a strong market position in the European learning materials market, and the segment's efficiency has increased through operational improvements. Relative to our estimated earnings growth, the stock is valued quite moderately, which, combined with Sanoma's moderate risk level, creates a very attractive risk/reward ratio. We reiterate our Buy recommendation and EUR 11.5 target price for Sanoma.

Learning is in the driver's seat

Sanoma Group comprises of Learning, which has a strong foothold in Europe and a media business, Media Finland. In the 2020s, Sanoma's focus has shifted more towards the learning business as the company has implemented an active M&A strategy. Thanks to the higher profitability and better predictability of the Learning business, the Group's profitability potential has increased, and the operational risk level has decreased. At the same time, the role of the media business has diminished, and the relative share of the declining print media, in particular, has decreased (2025: 18%). We expect this trend to continue in the medium and long term as a result of organic and inorganic growth in the Learning business.

We expect a strong pace of earnings growth in the coming years

The Learning business is defensive and predictable in nature, as the timing of curriculum reforms in its operating countries is foreseeable. Thanks to the timing of curriculum reforms in key operating countries, Learning has good organic growth prospects for the rest of the decade. We expect this growth to flow efficiently to the segment's earnings, as the business benefits from economies of scale with a more efficient cost base due to the extensive efficiency program in recent years. At the same time, the earnings growth outlook for the Media Finland business, which has been pressured by the digital transition, is boosted by the reflection of the gambling market liberalization in the advertising market starting from the middle of next year. Against this backdrop, we expect the Group's adjusted EBIT to grow at a solid 6% annual rate in the coming years, which is on the cautious side compared to the high single-digit annual earnings growth targeted by the company in its recent financial objectives. The key risks to our estimates are a strong acceleration of inflation, the development of the advertising market, and the scale of efficiency benefits realized from the Solar program.

Earnings growth and dividend create an attractive expected return

With the realized earnings, we believe the stock's valuation is neutral or at most slightly elevated (2025 adj. P/E 16x and EV/EBITA 11x). However, the earnings growth we expect will push the P/E ratios for 2026-2027 to around 11x and the corresponding EV/EBITA ratios to around 10-9x. Thus, the expected earnings growth will act as a significant driver of the expected return. Earnings growth, together with a dividend yield of around 5% in the coming years, raises the expected return significantly above our required return. We consider Sanoma's risk profile to be more moderate than average, which makes the stock's risk/reward ratio very attractive in our view. The valuation framework formed by the DCF model and sum of the parts calculation (EUR 12.0 and EUR 11.4 per share) support our view that the stock is attractively priced.